Bharti Airtel plans to expand Airtel 5G Plus services to 300 cities by March 2023 and cover all Urban areas by March 2024. Bharti Airtel's capex spent on 5G will be lower than that of 4G, as per a report by ICICI Securities. The report says Bharti Airtel deployed 4G on multiple spectrum bands, i.e. 900 MHz, 1800 MHz, 2100 MHz and 2300 MHz, but on 5G, the deployment will only be on the 3500 MHz band (3300 MHz) band. Bharti Airtel has spent Rs 1,115 bn on 4G over FY17-22, and ICICI Securities expects Bharti Airtel to spend Rs 454 bn on 5G and related capex over FY23-25E.
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Bharti Airtel 5G Capex
Bharti Airtel has announced a large capex outflow for the 5G rollout over the next few years. ICRA, in its report in January, highlighted that 5G Backhaul Fiberisation to cost Rs 3 Lakh crore for the telcos in India. For the same reason, Airtel has steadily and gradually increased entry-level tariffs to Rs 155 across 19 of its circles to avoid any bottleneck issues for rolling out 5G Services in terms of capex.
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Bharti Airtel has guided for PAN India capex of Rs 750 bn for the next three years, where in FY23 and FY24, Capex will be relatively high considering the initial rollouts of 5G and phasing out of 2G and spectrum refarming on 4G/5G. Bharti Airtel 5G Plus has reached over 130 cities, and as per its Q3FY23 investor call, the company is likely to have a presence in 300 cities by March 2023.
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Bharti Airtel 5G Rollout
Airtel is initially rolling out Non-Standalone 5G (NSA 5G), wherein the telco will use the 3300 MHz (3.5 GHz) band for downlink and 1800 MHz for the uplink purpose. The 1800 MHz Mid band will help Airtel coverage by additional 100-300mts and will improve overall consumer experience than the otherwise only 3500 MHz based 5G Network. For backhaul, E-band can provide a microwave throughput of up to 10 Gbps which can help with quality 5G services with one-hope fiberisation, says ICICI Securities in its report.
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Bharti Airtel Investments on 4G
Bharti had 118k MBB BTS at the of FY16, and the MBB BTS number has expanded to 752k by the end of FY22, adding around 634k BTS. Bharti has rolled out 4G using multiple spectrum bands - 900 MHz, 1800 MHz, 2100 MHz, and 2300 MHz- implying the equipment required was much higher than 5G. During this period, Airtel has spent a capex of Rs 1,115 bn (average spend of Rs 186 bn pa) on mobile services.
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Bharti Airtel Investments on 5G
ICICI Securities expects Bharti Airtel to add 41k 5G radio in FY23 and 134k in FY24. This means Bharti will have loaded 5G on 50% of its towers with the 3500 MHz band and 10% with the 26 GHz band for capacity and Fixed Wireless Access (FWA).
According to the report, Bharti should start re-farming the 2100 MHz band from FY25 and, subsequently, a few 1800MHz in future to 5G. As a result, ICICI securities expect Bharti to have 85% of towers loaded with base 5G band by FY27, and it will have an average of 1.85x 5G radio/tower in the same period.
After all the spending involved, ICICI Securities assumes Bharti Airtel will likely spend Rs 454 bn on 5G over FY23-25E.
