The two major telecom operators in India – Reliance Jio and Bharti Airtel are all set to witness speedy growth in revenue as well as the subscriber count after the 5G spectrum auctions. According to the analysts, this growth for the two telcos will come at the cost of Vodafone Idea in the medium term. Even though Vi is raising Rs 10,000 crore capital, analysts believe that most of it will be utilised to enhance the 4G network of the cash-strapped telco.
Jio, Airtel to Grow at Vi’s Expense
As per a report from ET Telecom, an estimation from the analysts suggests that Reliance Jio and Bharti Airtel are expected to acquire somewhere around 150-to-200 basis points (bps) gains over two years after the upcoming 5G airwaves sale whereas Vi is most likely going to concede some points. Notably, the basis point is 0.01%. TRAI has already shared its recommendations and we can expect the auction to be held in May or June as the government is planning to roll out the 5G network in August around Independence Day.
According to the senior director at the global rating agency Fitch, Nitin Soni, Airtel and Jio should see an acceleration in revenue and subscriber market share gains at Vi's expense in the medium-term after the 5G auction. He added that both telcos will definitely target pan-India 5G airwaves to invest in this future broadband technology which financially struggling Vi won't be able to match.
Analysts inform that Airtel and Jio have sturdy balance sheets which will enable them to invest top dollars in pan-India 5G airwaves and consolidate their mobile broadband play. This move from telcos will come despite the fact that 5G spectrum spending in the initial years is probably going to yield low returns. On the other hand, Vi is not going to play a major role in the upcoming auction because of the lack of capital.
Previously, the Telecom Regulatory Authority of India (TRAI) has recommended including airwaves in the following spectrum bands in the upcoming 5G spectrum auction — 526-698 MHz, 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz, 3300- 3670 MHz and 24.25-28.5 GHz. The regulatory body said that all the spectrum unsold in the previous auction will also be made available to the telcos in the 5G auction.
