One-third of Indian mobile phone users likely to be on 5G by March 2025: CRISIL Ratings

One-third of Indian mobile phone users likely to be on 5G by March 2025: CRISIL Ratings

The research agency says telcos are on 5G roll-out spree across India having launched the service in over 300 cities already, but mass adoption will happen with more 5G use-cases.

5G network technology mobile phones

Representational image | Photo: PTI

New Delhi: About 300 million people, or a third of mobile phone users in India, are expected to use 5G services by March 2025, while the remaining two-thirds would continue to use 4G technology, according to CRISIL Ratings. Currently, 20-25 million people in India are estimated to be using 5G services.

The growth in adoption of 5G is also expected to push average internet data usage per subscriber per month to 28-30 gigabyte (GB) by fiscal 2025 from about 20 GB at present, driven by increased adoption of over-the-top streaming services and online gaming.

Naveen Vaidyanathan, Director, CRISIL Ratings, said in a statement Wednesday: “Currently, about 30-35 per cent of the approximately 150-170 million smartphones shipped in India annually are 5G-enabled. While the share of 5G smartphone shipments will improve gradually, (yet) low initial value proposition and high cost of the gadget versus a 4G-phone would restrict overall 5G adoption to approximately 300 million users by fiscal 2025. Put another way, this would mean only a third of the data users in the country will be plugging into 5G services by fiscal 2025.”

The research agency pointed out that telcos are on a 5G roll-out spree across India, having already launched the service in more than 300 cities since October 2022. However, mass adoption would gather pace only when more 5G use-cases appear for consumers.

Despite identification of a plethora of 5G-led use cases, such as smart classrooms, precision farming and intelligent transport systems, large-scale adoption of the technology hinges on significant improvement in network infrastructure, which is set to happen gradually over the next few years.

Till then, CRISIL Ratings said, the adoption of 5G services would be largely driven by technology-neutral tariffs being offered by telcos currently.

The penetration of the 5G device ecosystem among users would also be crucial for uptake of 5G services, it added.

Additionally, subscribers of 5G services will provide a fillip to data consumption because they would uptrade to higher data packs for better speeds, which will drive up overall average revenue per user (ARPU) for telecom companies.

“India is already one of the highest data-consuming countries. 5G could accelerate adoption of over-the-top streaming services and online gaming, which would drive data demand further,” Rounak Agarwal, Team Leader at CRISIL Ratings, said.

“Consequently, average data usage per subscriber per month is expected to rise to approximately 28-30 GB by fiscal 2025 from approximately 20 GB at present. We see customer uptrading because of higher data demand, rising share of post-paid subscriptions and tariff revisions driving up ARPU to approximately Rs 250 over the medium term,” he added.

(Edited by Nida Fatima Siddiqui)

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