When Rajen Vagadia took over as country manager of Qualcomm India in 2018, the country was witnessing a massive surge in data usage, thanks to the launch of 4G by Reliance Jio two years earlier — and the rapid launch of 4G by all other mobile service providers. Data consumption (driven in large part by gaming, video, and entertainment) had suddenly skyrocketed. Prices per GB of data had plunged by as much as 1/10th from over Rs 150 per GB to less than Rs 10/GB.
Vagadia was in the thick of the 4G device ecosystem — almost all of which were powered by Qualcomm’s chipsets. In the last four years, he has been part of the rapid transition from 4G to 5G — which has brought in its wake a huge surge of expectations of new technologies and use cases.
Vagadia, who is VP and President- Qualcomm India & SAARC, shares thoughts on a wide range of issues around the new paradigms expected from the 5G economy in an interview with Moneycontrol.
What is your view on the response from subscribers to 5G services launched in India?
India has seen one of the fastest growths in data consumption over the past several years. India's average internet data usage has increased from 1.24 GB per month in 2018 to 17.18 GB in 2023. There is an innate need and desire to access and share content, both for business purposes as well as socially. And this is only going to get stronger, both in terms of quality and quantity. The need for better broadband technologies always existed and thankfully we now have 5G being rolled out.
It is early days for 5G in India but there’s no doubt that India is one of the fastest-growing digital economies in the world. There is a sizeable and growing segment of “experience first” consumers who seek premium mobile experiences. 5G will mark the era of next-gen connectivity for Indian consumers and drive mobile data usage and revenue for telcos. Even before the 5G rollout started, consumers have been seeking out 5G-compatible models at the time of upgrading their devices.
With telcos expanding the coverage of 5G services in their circles of operations, we can expect quite a significant percentage of India’s digital user base to upgrade to 5G in the coming years. This will enhance the consumer experience significantly.
A lot depends on the availability of affordable 5G handsets. What is your view on the expected volumes this year?
Our view is extremely positive. The volumes of 5G handsets being shipped have been on a largely upward trend in recent quarters, as consumers seek to “future-proof” their devices.
As 5G services get rolled out in more and more circles, the demand for 5G handsets is expected to increase further. The current mix of 5G devices in India is already at around 40 percent and 5G shipments are expected to grow to 50 percent of overall smartphone shipments by the end of the year.
Affordability, of course, remains an important consumer selection consideration, however, the consumer does not want to compromise even on other aspects such as better display, camera, memory, etc. Today, almost all major OEMs have a sizeable 5G portfolio as part of their current and planned offerings. As per Counterpoint data, 5G smartphone share in lower price bands (less than Rs 20,000) is gradually increasing (from 4 percent in 2021 to 14 percent in 2022) and is expected to reach 30 percent by the end of 2023.
Is the sweet spot of around $80 to $100 achievable for 5G devices?
The affordability of handsets will be important to the deeper adoption of 5G. On our part, Qualcomm has made a conscious effort to develop a 5G chipset portfolio for multiple price points. However, a lot also depends on adjacent cost factors like display, battery life, camera, and storage on the ODM/OEM side as those technologies are also evolving and driving customer experience. As 5G adoption picks up pace, market dynamics will ensure that prices touch a sweet spot at all levels, from entry-level to premium.
What will Qualcomm’s role be in this?
Qualcomm has developed 5G technologies and chipset platforms for a wide range of industrial and consumer applications. We currently have 5G-enabled mobile platforms across multiple price tiers and are working to expand that portfolio. We work with OEMs to help them build a healthy portfolio of 5G-enabled devices across multiple price points. On the services side, we play an active role in enabling 5G use cases for consumer and commercial applications and through technology collaborations with government bodies, telcos, independent software vendors, application ecosystem and infrastructure vendors.
Will the growth of 5G devices lead to a drastic drop in pure 4G device shipments?
It is expected that cumulative 5G smartphone shipments will cross the 100-million mark in Q2 2023 and surpass 4G smartphone shipments by the end of 2023. However, given India’s diverse user base, we will see both 4G and 5G handsets in co-existence. While the infrastructure for 4G is fully functional and efficient, 5G will take some time to reach that stage. Even as 5G decongests the 4G networks, it will improve the user experience for both 4G and 5G consumers. It also creates scope for other 4G-connected devices in the areas of IoT (smart products and utilities) and auto. All in all, 4G device shipments will continue to remain relevant and even see expansion into new areas of growth, beyond smartphones.
Is there any room for 4G and 5G networks to co-exist in the next 3-5 years?
Absolutely. 4G and 5G networks will co-exist for quite a while. 4G networks have been developed over several years of hard work by operators. 5G networks will also take a similar effort to reach that type of coverage. As such, a handset will operate in 4G as it moves out of the 5G network. The existing 4G networks will provide that cushion for service continuity as well as deploying other use cases for IoT. At some point, operators may decide to migrate 4G spectrum to 5G. However, that may not happen in the next 3-5 years. As such, the two networks can co-exist.
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