Spectrum buy complete, operators to focus on quality and coverage

BL Mumbai Bureau | | Updated on: Aug 05, 2022

Reliance has the edge with 700 Mhz buy but Airtel is not too far behind

After completing the biggest buyout of spectrum ever, telecom operators will have to focus on improving quality of services and strengthening infrastructure to be able to take a higher share of the customers’ wallets.

“5G will create more usage of data and that will drive up average revenue per user for the telecom operators. But if the operators want to charge a premium for 5G services then they will have to create differentiation which can happen only with more infrastructure and better service,” said Prashant Singhal, Emerging Markets Technology, Media and Telecommunication (TMT) Leader, EY, said.

5G race

Going by the outcome of the latest spectrum auction, Reliance Jio seems to be ahead of the pack to take advantage of the 5G opportunity. Jio has acquired a unique combination of low-band, mid-band and mmWave spectrum, which coupled with its fibre network and indigenous technology platforms, give it an advantage over others. The biggest gain for Jio is the spectrum acquisition in the 700 Mhz band. This frequency band is the best for offering 5G services especially in rural areas and indoor coverage. The band will also enable Jio to offer the quality of a fixed broadband network on a wireless ecosystem. “ This will put pressure on Airtel to acquire 700 Mhz in the next round of bidding but will have to pay what Jio has paid in this round of auction. The pricing for 700 Mhz has finally been set for the first time thanks to Jio,” said Sanjay Kapoor, former CEO, Airtel.

But according to Kapoor, Airtel can take recourse to refarming its existing spectrum in the 900 Mhz, 1800 Mhz and 2100 Mhz to blunt Jio’s play in 700 Mhz band.

Will 5G services be expensive?

Experts suggest that the operators will initially bundle 4G and 5G as complimentary services because the 5G network will be patchy to begin with. “There are only about 2.5 lakh telecom towers per operator. To offer unblemished 5G services for applications like IoT, the infrastructure will have to be ramped up. Globally, so far, operators who have tried offering 5G services at a premium have found no takers,” Kapoor said.

Govt is big winner

In the overall assessment, this round of spectrum auction has been a big win for the government as it has been able to get over ₹1.5-lakh crore spread over 20 years. The operators have also gained because they won’t need to buy spectrum for many years going forward other than incremental purchase in some circles.

For consumers, 5G services is expected to bring better mobile broadband services. In addition to improving mobile broadband,  5G technology will enable the delivery of critical services such as telesurgery and the Internet of Things over a mobile network with unprecedented efficiency, in addition to opening the floodgates for innovative applications that require a massive amount of high-speed bandwidth. The biggest benefit for millions of mobile users in a country like India, where poor data connectivity has become the norm, is that 5G promises to make wireless networks close to what wireline broadband network offers- uninterrupted service and unlimited bandwidth.

Published on August 01, 2022
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