Swedish telecom gear maker Ericsson said Tuesday it expects 5G subscriptions in India to account for 40% of mobile subscriptions – 500 million – by the end of 2027.

“Even though 5G has not been launched commercially, there is already a good foundation for 5G uptake in India,” Ericsson said in its biannual Mobility Report released Tuesday.

4G, which is dominantly driving connectivity in India will see its contribution dropping to 55% in 2027, from 68% currently. 4G subscriptions are forecast to decline annually to an estimated 700 million subscriptions in 2027 as subscribers migrate to 5G, as per the report.

“Total mobile data traffic in the India region is estimated to grow by a factor of 4 between 2021 and 2027. This is driven by high growth in the number of smartphone users and an increase in average usage per smartphone,” said Thiaw Seng Ng, Head of Network Evolution, SEA, Oceania and India, Ericsson.

The average data traffic per smartphone in India is projected to grow from 20GB per month in 2021 to around 50GB per month in 2027 – a CAGR of 16%.

Fifth-generation technology will also help Indian telecom companies to generate $17 billion in incremental revenue from enterprises by 2030, as per the report which cited a joint Ericsson-Arthur D Little study, even as a decision by Cabinet on direct spectrum allotment to private firms for setting up captive private wireless networks (CPWNs) has become a flash point between telcos and technology companies here.

Interestingly, 56% of all data traffic is likely to be carried by 5G networks in India by 2027.

India’s first 5G spectrum sale is scheduled from July 26, which will see 72GHz of airwaves put to auction. Major participation is expected from Reliance Jio and Bharti Airtel, and from Vodafone Idea to some extent.

The government is looking to net up to Rs 4.5 lakh crore at base prices.