Reliance Jio’s strategic bidding in the recently concluded 5G auctions has likely made it hard for Bharti Airtel to deploy a contiguous 5G network in six service areas. While Reliance’s surprise bid in 700MHz has drawn the most attention from experts, Reliance Jio has made a strategic play in the more relevant 3.5GHz band by amassing large quantities of spectrum in six specific service areas, thereby compelling its nearest competitor, Bharti Airtel to own poorer quality spectrum in these geographies. In LSA’s, Himachal Pradesh, Jammu and Kashmir, Karnataka, Kerala, Rajasthan, and Uttar Pradesh (West), Reliance Jio strategically bought more spectrum than it did in service areas in order to ensure that only 40 per cent of mid-band spectrum bought by Bharti Airtel was clean.
This means Bharti Airtel will have substantively less spectrum in six service areas, including major LSAs as far as subscribers are concerned (Kerala enjoys the third highest teledensity amongst all LSA’s, while Uttar Pradesh is India’s most populous state).
The type of spectrum available in the 3.5GHz spectrum band incentivised operators with deep pockets to bid aggressively in order to capture the cleanest spectrum available and outbid their competitors from accessing contiguous spectrum.
Clean and unclean spectrum
In the 3.5GHz band, only 170 MHz of the available spectrum is “clean”, which means that it is available in all parts of these six service areas (HP, J&K, Karnataka, Kerala, Rajasthan, and UP West). Following which, 30MHz of spectrum is not available in 6 locations in these 6LSAs, after that about 100MHz of spectrum will not be available in 50kms adjacent to international borders.
Reliance Jio purchased 100MHz of spectrum in the mid band in most service areas. However, in order to push Bharti Airtel into a disadvantegeous position, they purchased 130MHz of spectrum in the 6 LSA’s where parts of the band were “unclean.”
This means Bharti Airtel has only 40MHz of spectrum available across the whole service area, in these locations. An expert, on conditions of anonymity, explained, “Reliance Jio’s bidding strategy has essentially punched a hole into Bharti’s spectrum in 3.5GHz in these locations. Hundreds of kilometers of areas as well as entire cities could be impacted as far as 5G rollout is concerned. Airtel will have far less spectrum, which means it will be able to transmit lesser data in certain areas in these LSA’s versus Jio.”
Interference in 30MHz in these six service areas is as a result of the Indian Regional Navigation Satellite System (IRNSS) installments. An expert explained, “While the Department of Telecommunications is still to share the exact geographical areas that will be impacted, Port Blair, Bhopal, Shillong, Hassan, and Trivandrum lie in this area of interference, which means Airtel’s 5G deployment in these major cities will be affected.” According to the expert, Airtel was expecting this auction outcome, which is why it has been conducting trials with IRNSS to ascertain how much they would be able to mitigate the interference.
Therefore, while the telecommunications industry is looking at a Bharti-Jio duopoly at the back of outcome of 5G spectrum auctions- Bharti Airtel is off to a staggering start in the 5G race. Not only does Jio have the premium 700MHz band, which will allow it to do standalone 5G deployment, with quality network available over longer distances and indoors- it has put Airtel on the backfoot in the 3.5GHz band. “Airtel will need to have finesse in execution to ensure it does not lose market share to Jio,” said an expert.