Vodafone Idea and Bharti Airtel Will Close Gap With Reliance Jio 4G Services Owing to Newly Raised Capital

Vodafone Idea and Bharti Airtel are already on the task of upgrading their 4G network to better compete with Reliance Jio

Highlights
  • VIL and Airtel ask for 5G spectrum auction to be pushed back a year
  • Reliance Jio approves of recommended pricing and auction timeline

Mukesh Ambani led telecom operator, Reliance Jio will work on its 5G services and speed up the rollout of the technology by the second half of the 2020 calendar year with the aim of obstructing gain of Vodafone Idea and Bharti Airtel through their 4G-led data monetisation. The report came from SBICap Securities and was brought to light by ET Telecom. SBICap Securities said that Reliance Jio’s announcement of stepping into the 5G field early is majorly driven by Vodafone Idea’s and Bharti Airtel’s plans of raising capital. As per Rajiv Sharma, co-head of research at SBICap Securities the 5G spectrum auction is likely to happen in January 2020.

Reliance Jio ready for Early 5G Spectrum Sale

It is noteworthy that according to the previous reports, Reliance Jio is the only telecom operator in the sector which is in favour of an early 5G spectrum auction and is also supporting the recommended prices. This is unlike Bharti Airtel and Vodafone Idea who have opposed the early sale of the 5G spectrum. Airtel has also demanded to lower the cost of some sub-GHz band, and Vodafone Idea has asked the DoT to push the auction sale back to next year.

Sharma sees “Jio making a decisive 5G upgrade next year to make competition from Airtel and VIL on the 4G front irrelevant, in its bid to maintain leadership on the fast broadband technology, thought and revenue market share fronts.”

VIL and Airtel will Combinedly Raise Rs 50,000 Crore

Vodafone Idea and Bharti Airtel are both going to be raising as much as Rs 50,000 crore from their planned rights issue and imminent asset sales. Both the incumbents will thus narrow the gap between Jio’s 4G services and their own, and it will happen across all prominent urban markets. Sharma added to his words saying, “Jio’s early move to 5G is inevitable to sustain market share gains, and we see it selectively deploying this nextgen wireless broadband technology by the second half of 2020.”

According to the experts, the fundraising plan by Vodafone Idea Ltd and Bharti Airtel is not good news for Reliance Jio as all the raised capital will go into developing 4G which will mean increased competition and closing gap for Reliance Jio. Sharma also remarked that if Vodafone Idea and Airtel deploy all their raised capital in 4G then together they could claim 425 million subscribers, which will be enough to upgrade all their 2G subscribers to 4G subscribers which will mean a saturation point for Reliance Jio in terms of market share after 9-12 months.

SBICap Securities has also said that Reliance Jio will likely hasten up the rollout of its home broadband and cable TV service, Reliance Jio GigaFiber in light of the recent developments. On the other side, Vodafone Idea has been relentlessly deploying new 4G and 5G equipment including new mobile sites, TDDS and more in urban regions to give a boost to its existing network.

Arpit spends his day closely following the telecom and tech industry. A music connoisseur and a night owl, he also takes a deep interest in the Indian technology start-up scene and spends rest of his time spilling poetry and stories on paper.

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