With eyes on 5G, Airtel, Jio pick different routes to prepare for next big tech battle

Telecom companies are eagerly looking to tap the upcoming 5G opportunities in India. Reliance Jio and Bharti Airtel are pitted against each other as they gear up to leverage 5G as the next frontier for future growth in a country with the second-largest number of telephone connections in the world.

Last week Bharti Airtel said its network is 5G ready now as the telco successfully demonstrated live fifth-generation service — with ultra-high speeds — over a commercial network in Hyderabad city.

For the demo run, the company leveraged the existing liberalised spectrum in the 1800 MHz band. Using dynamic spectrum sharing, Airtel seamlessly operated 5G and 4G concurrently within the same spectrum block.

On the day of Airtel's announcement, the government also eased the path for the 5G rollout in the country by reducing to six months the notice period for offering any new technology using the spectrum being put up for auction in March.

According to a report by Business Standard, Airtel's move came days after Reliance Jio "quietly tested its own indigenously designed standalone 5G radio and core far way in the US on a Verizon 5G live network."

The report adds that during its investor presentation on its quarterly results, Reliance Jio had announced that its indigenous core and radio has achieved throughputs of 1 GBPS or nearly 10 times the highest speeds for 4G.

The telecom sector is headed for an auction of airwaves in the next quarter, which combined with telcos' network investment compulsions and (Adjusted Gross Revenue) AGR liabilities could hasten tariff hikes in 2021.

Spectrum auctions, potential tariff hikes

Bharti Airtel — which has lost the number one spot in the market to Mukesh Ambani's Reliance Jio — hinted that while it is not going to initiate tariff hikes, it will follow if others raise prices.

In the ensuing auctions, Airtel is expected to restrict itself to renewing expiring spectrum across 900 and 1800 MHz bands, given its spectrum holdings through mergers and acquisitions over the last three years while Jio is seen adding more spectrum, according to Credit Suisse.

Jio may purchase additional spectrum as it looks to augment its network capacity having garnered 35 per cent subscriber market share and a much higher share of traffic, the Credit Suisse note said.

The upcoming auction is expected to garner a moderate response, though industry experts believe bids could be in the range of Rs 30,000 crore to Rs 50,000 crore for the radiowaves valued at around Rs 3.92 lakh crore.

The upcoming auctions won't include spectrum bands that support 5G services, which can play a crucial role in supporting emerging technologies like Artificial Intelligence(AI) that hold the potential to add over Rs 7,000 crore to the economy by 2035.

(With PTI inputs)