The Indian government is assessing challenges related to 5G investments, as telecom operators struggle with low returns despite heavy spending on infrastructure, a senior official said on Friday. At the ICRIER Prosus Centre for Internet and Digital Economy event, telecom secretary Neeraj Mittal highlighted the rising demand for data and the growing pressure on spectrum availability.
Surge in Data Consumption Puts Strain on Infrastructure
Mittal revealed that India’s median data speed has surged from 100 Mbps in September to 151 Mbps, with an individual consuming an average of 29GB of data per month. However, most of this data usage is for entertainment, which requires continuous expansion of telecom infrastructure to maintain network quality.
“We are going to see a lot of pressure on spectrum as data flow increases. We need to find new spectrum for mobile and broadband usage,” Mittal stated.
As India prepares for a transition from 5G to 6G, massive capital expenditure will be required to expand networks and acquire spectrum.
5G Rollout: High Investment, Low Returns
Private telecom operators have invested around ₹70,000 crore in 2024 to expand 5G infrastructure. However, monetization remains a challenge as operators struggle to find viable 5G use cases beyond faster speeds compared to 4G.
Currently, Reliance Jio and Bharti Airtel are offering 5G services for free under their existing 4G plans, delaying any substantial return on investment. Meanwhile, Vodafone Idea and BSNL have yet to launch 5G services.
BSNL, however, has completed the installation of 80,000 mobile towers for 4G services, marking one of the largest network deployments in the country.
Affordability of 5G Devices Remains a Challenge
A key challenge to 5G adoption is the high cost of compatible smartphones, which remains out of reach for many Indian consumers. Mittal stated that the government is actively working on solutions to improve affordability and accessibility.
“Affordability of 5G devices remains a major concern. These are the challenges the government is looking into, and we will work on them over time,” he said.
Telecom Industry Demands Revenue Contribution from Big Tech
Telecom operators have long argued that Big Tech firms—including Google, Amazon, Meta, and Netflix—should contribute financially towards network infrastructure costs, as they consume a majority of the data traffic.
The Cellular Operators Association of India (COAI) has proposed a fair usage policy that would require foreign apps to share revenue with network providers to ensure sustainable telecom infrastructure expansion.
However, internet industry bodies have pushed back, arguing that charging specific apps for data usage would violate net neutrality principles. The COAI has contested this, insisting that telecom networks must be compensated for the burden imposed by data-heavy applications.
Also read: TRAI Clears 5G Auction in 37-40 GHz Band
What Lies Ahead?
As India’s 5G adoption accelerates, balancing investment returns, affordability, and infrastructure expansion will be crucial. The government’s next steps—whether through policy reforms, spectrum allocation, or regulations on Big Tech revenue sharing—will determine the future of India’s telecom sector and its transition to 6G.
