New Delhi: Indian telecom companies may need to invest around Rs 1 lakh crore on optical fibre network in the next 2-3 years to support 5G services, market research and analyst firm Crisil said Monday.
"5G technology dictates fiberisation levels of over 70 per cent, versus 25-30 per cent levels at present. Crisil estimates that if each player were to reach this level individually, Indian telcos may need investments of up to around Rs 1 lakh crore only in laying fibre networks over the next 2-3 years," Crisil said.
It is estimated that less than 10 per cent of mobile towers in the country are connected with optical fibre and, hence, cannot support high-speed data required for 5G services.
"Higher land cost and right of way approvals make fiberisation cost per kilometre as high as approximately Rs 1 crore per kilometer in metros," the report said.
Crisil said fiberisation in the country will be expensive and hard for telecom companies as they are reeling under the cumulative debt of Rs 4.3 lakh crore.
Besides, the spectrum price recommended by the Telecom Regulatory Authority of India is higher than the price discovered by leading countries such as South Korea and the United Kingdom.
"That is why India is set to witness some tectonic shifts in the fiberisation landscape and the birth of new business models among telcos and tower companies around the launch of 5G," the report said.
According to the report, BSNL has over 8 lakh kilometres of optical fibre cables (OFC), followed by Reliance Jio with over 3 lakh kilometre of OFC, Bharti Airtel (about 2.5 lakh kilometre) and Vodafone Idea (1.6 lakh kilometre).
BSNL OFC also includes the asset that it has laid under the BharatNet project.