The telcos including Vodafone Idea (Vi), Reliance Jio, and Bharti Airtel are currently testing their 5G networks in different parts of the country. Airtel has taken the tests even one step above and proved that the mobile gaming use case on its 5G network is successful. There was an underlying concern with 5G though. While it was definitely going to be the next big thing, operators might not have been too aggressive with the 5G rollouts.
Multiple reasons such as high spectrum cost, less return on investment because of industrywide low average revenue per user (ARPU) and one telco, Vodafone Idea was just not in a position to invest on 5G airwaves at all. I use the term ‘was’ because all of that has changed now. The reason behind that is the government help.
Everyone Vodafone Idea, Airtel, and Jio Are In Good Position Now
While Vi is still much behind Airtel and Jio, it has still reached a position where it can take advantage of the moratorium announced by the government, increase tariffs, and improve the cash flow of the company aggressively. The moratorium of payments benefit announced will also enrich the cash flow positions of Airtel and Jio significantly.
This will give the operators more headroom to spend in the 5G spectrum auctions. From now onwards, telcos can even surrender the unused spectrum after 10 years from the date of purchase.
The new reforms don’t just benefit the existing players. But in the 5G era, we might witness a new player entering the market trying to take advantage of the new reforms. Any new company that will enter the ecosystem will be able to benefit a lot because of the relief package that the sector has received. But it is unlikely that will happen until the time there is a tariff hike in the overall industry. No company would like to enter a market where there is cutthroat competition for gaining a larger market share by offering very affordable services.