India's Sterlite Technologies wants to connect with Middle East's 5G possibilities

Dubai: India’s Sterlite Technologies (STL) is on the lookout for potential partners and clients in the Gulf’s fast-track 5G telecom rollout.

It is “a very strategic area for us by virtue of the fact that technology adoption is high, new infrastructure continues to get built (and) there is a good amount of capital available,” said Anand Agarwal, Group CEO of STL. “We are talking to several players, including people who are looking at creating new infrastructure.”

STL, which has a market cap of nearly $1.5 billion, is back into expansion after a blockbuster first quarter this year. The telecom equipment provider’s quarterly profit soared more than 1,000 per cent to around $15.6 million as COVID-19 restrictions were eased in India.

STL provides 5G ready digital network solutions help telcos, cloud companies and large enterprises. This includes optical connectivity, network modernization and fibre deployment.

Watching closely

UAE is very much on STL’s radar. Agarwal pointed out that while tech innovations typically move from the West to the East, in the case of telecom, it i the exact opposite. “We see the east - Taiwan, Singapore, South Korea (and) Japan - being very well progressed in terms of all these technologies,” said Agarwal. “Middle East as a whole and the UAE specifically are at the forefront, whether it is 5G or fiber-to-the-home.”

All inhabited parts of the UAE will come under 5G network coverage by end 2025. Demand for 5G services shot up during the pandemic as working from home and hybrid working models became the norm.

Earlier, the telcos would invest their own capital, but that’s changing now. “We are seeing cloud companies - the likes of Microsoft and Amazon - get into this digital transformation in a major way,” said Agarwal. We are seeing the private equity funding coming in a major way towards the networks that need to get created.”

5G adoption rates

Even though 5G adoption is increasing, the average consumer still has to shell out upwards of Dh3,000 to enjoy 5G-level speeds. “I would almost see a similar thing that has happened with 3G and 4G, the same will happen with 5G,” said Agarwal. “With the volumes picking up, the subsidization is starting to happen - we are very close, because in countries like China and South Korea, it (5G) is very prevalent. Currently, there is just this added dimension of a chip shortage, so that has kind of created this delta.”

Many factories closed due to the lockdowns and restrictions, making the supplies needed for chip manufacturing unavailable for months. However, this supply deficit will not last for more than a “few” quarters, said Agarwal.