If you have followed the news in the last few days, you must have heard how fast the Indian telecom operators are trying to roll out 5G. The Indian govt, as well as the private telcos, are trying to roll out 5G at the fastest pace compared to how much time other countries took. It's a noble initiative as the technology stands to benefit everyone in the country. 5G is also going to be a significant contributor to the GDP by the end of this decade. But, in the short term, will Jio and Airtel actually benefit by rolling out 5G fast?
5G is Going to be in Demand from Enterprises
5G can enable several beneficial use cases for enterprises across sectors and industries. For the first time, mobile network technology isn't just consumer-focused. There are many enterprises which would require 5G. Not just that, it would also give an opportunity to tech players such as TCS (Tata Consultancy Services), Tech Mahindra, and more to form partnerships, develop 5G solutions and products and offer them to other businesses to boost revenues. It is worth noting that Tech Mahindra recently announced that it has partnered with Axiata to offer co-developed 5G solutions to enterprises in five different nations.
So in the short term, a quick rollout of 5G would benefit not only the telcos but also the enterprises. However, our focus is on what benefits would come to Airtel and Jio directly in aggressively rolling out 5G. Well, it would do just one thing primarily - increase subscriber market share.
Airtel and Jio are Launching 5G Fast to Win Customers
It is common logic, to be honest. Both telecom operators are trying to roll out 5G fast so that they can garner a bigger market share of subscribers who are looking to consume 5G services in the near future. This is what Vodafone Idea is missing out on. Both Airtel and Jio can market their 5G services to consumers and retain them for longer and, at the same time, attract new customers. Vodafone Idea customers who want 5G will definitely have to move to either Airtel or Jio's 5G network services.
Thus, rolling out 5G fast to new areas of the country would enable Airtel and Jio to market their services to more customers and add more subscribers in the short term. It is unlikely going to have a huge positive impact on their revenues as they are not going to increase the 5G tariffs too much because then it would lead to less uptake by the consumer, resulting in lower revenues.
So the math is simple, whoever rolls out 5G first is going to have the upper hand over the other in terms of controlling the subscriber market share. Airtel CEO Gopal Vittal has already said that they are looking to leverage 5G to add subscribers in the short term.