Reliance Jio, the largest private telecom operator in India, is reportedly slowing down its 5G network expansion due to low capacity utilisation and a delayed monetisation timeline. This has led Jio to focus on upgrading its 4G customers to the more expensive next-generation service. Airtel is also focusing on enhancing its 4G network to transition its remaining feature phone users to smartphones. Both telcos are looking at a need-based strategy for their 5G expansion, as the monetisation of next-gen mobile services (5G) has yet to gain traction without compelling use cases, according to a report by ET.
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Jio's 5G Users and Network Coverage
Jio claims on its website that its 5G user base in India now exceeds 130 million, with its 5G network covering 7,764 cities and towns.
According to the report, sources close to Jio's vendors indicated that the telco's 5G network utilisation is around 15 percent. However, sources close to Jio disputed this figure, stating that it is more than double that.
Finland's Nokia and Sweden's Ericsson are the equipment suppliers for Jio's 5G network. "Jio's focus is to migrate its 4G users to 5G, but this won’t happen overnight. The next round of purchase orders for 5G equipment could be several quarters away, as network utilisation needs to rise sharply," the report quoted one of the people cited as saying.
"Further investment by Jio will be need-based," a Jio spokesperson said, according to the report. Jio also mentioned that its 5G network already covers over 90 percent of India's population and is significantly ahead of the competition (Bharti Airtel) in both coverage and capacity.
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Outlook for 5G Network Expansion
Industry experts quoted in the report added that Jio's next round of 5G network expansion is likely to occur once it faces more competition from Airtel. "This is not the case now, given that Jio's 5G user base (130 million) is higher than Airtel’s (90 million)."
Furthermore, according to the report, the Jio spokesperson said, "Based on data growth on the telco's network and benchmarks from reputable third-party global entities that rate carrier network performance—such as OpenSignal and others—Jio’s 5G standalone (SA) network has consistently been rated as the world leader in network availability, experience, and in carrying the highest amount of data traffic."
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"Jio would invariably need to double down on 5G network expansion once its 4G-to-5G conversions pick up and demand for its 5G-based AirFiber services see further momentum," the report quoted senior industry executives as saying.
