Bharti Airtel will be launching 5G services starting this month and plans to commence a pan-India roll-out of their 5G services very soon.
Gopal Vittal, Chief Executive Officer of Bharti Airtel, said in his earnings address, “By March 2024, we believe we will be able to cover every town and key rural areas as well with 5G.”
Vittal also said that Airtel has completed detailed network roll-out plans for 5,000 towns. “This will be one of the biggest roll-outs in our history. While our three-year capex will remain around the same levels, this rapid roll-out could see some advancing of capex, “said Vittal.
The consensus amongst experts in the industry is that the sector is veering towards a Bharti-Jio duopoly, with Reliance Jio being in a far more advantageous position for rolling out 5G services.
In the recently concluded 5G auctions, Reliance Jio purchased nearly 60 per cent of the spectrum sold. Jio was also the sole operator to buy sub-GHz spectrum, 700 MHz for 5G use, and thus can deploy a mature standalone 5G network.
Jio has also strategically pushed Airtel to buy spectrum in the 3.5-GHz band, where Bharti Airtel will encounter interference from Indian Regional Navigation Satellite System (IRNSS) installations.
Largest pool of mid-band spectrum
However, Vittal observed in the Q1 earnings call that Airtel’s 5G on non-standalone technology will still be highly competitive and, in fact, advantageous to Jio’s standalone network. Vittal noted that Airtel has far superior mid-band spectrum holdings over its competition, which allows it to offer a robust non-standalone network, while its competition has no other choice but to offer a standalone network.
“Over the last few years, we have strategically accumulated the largest pool of mid-band spectrum—today we have 30 Mhz of mid-band spectrum in four circles and 20 or above in the rest. Our competition does not have such a large mid-band spectrum.
“Do remember that if we did not have this large chunk of the precious mid-band spectrum, we would have had no choice but to buy an expensive 700-MHz spectrum. And once we had bought it, we would have had to deploy large power-guzzling radios on this band,” Vittal explained.
A non-standalone model
According to him, there are many advantages of deploying a 5G network in a non-standalone mode. One, a non-standalone network will give the company more coverage in urban areas. Two, given that the initial deployment of 5G networks globally has been on a non-standalone network, with less than 10 per cent of 5G traffic on standalone 5G networks, far more devices are compatible with a non-standalone network versus a standalone. Therefore, by economies of scale, non-standalone mobile devices will be far more affordable.
Unless Jio invests massively in the device ecosystem as it did for 4G with the Jio phone, the present iteration of the device ecosystem will be a hurdle for Jio. Another advantage, as per Vittal, is that the capex cost will be much lesser on a non-standalone network, since Airtel can use its existing 4G core to provide a 5G network.
‘All’s not lost for Airtel’
Experts also concur with Vittal’s observations that all is not lost for Airtel in the 5G race. An expert told BusinessLine, on condition of anonymity, “It’s a billion-dollar question whether 700 MHz will prove important for the upcoming 5G race. Airtel always plays the prudent financial game, while Reliance Jio has over-extended itself financially.
“However, a standalone 5G network is still the gold standard for 5G deployment, which allows telcos to unlock a wider range of use cases promised by 5G, such as network slicing, better voice etc. Most telcos globally are transitioning to a standalone network.”
Published on
August 09, 2022
