Reliance Jio is the only telecom operator in India which has 700 MHz airwaves post the completion of spectrum auction 2022. This spectrum auction focused on 5G airwaves. Until now, telecom operators had skipped purchasing 700 MHz spectrum because of its steep reserve price. But this time, Jio had an aggressive approach, and it acquired PAN-India 10 MHz of airwaves in the 700 MHz band. Because of this purchase, Jio's total spending went up to Rs 88,078 crore. This is comparatively way more than what Airtel and Vodafone Idea (Vi) spent during the 5G auction. If you are wondering why Jio spent so much money on purchasing the 700 MHz spectrum, here's what you should know.
Why Jio Spent so Much Money to Get 700 MHz Spectrum, and How is it Beneficial for Customers?
Jio spent money on getting the 700 MHz spectrum because of the immense benefits it brings to the table for the customers. Since it is a low-frequency band, it will be optimised for delivering better coverage. Jio will be able to deliver better indoor mobile network coverage with this sub-GHz spectrum band.
What's interesting to note here is that Jio will be the only telco in the country that will be able to provide 5G services in rural areas at a very low cost because of the 700 MHz band.
"Reliance Jio is the only telco which purchased 700 MHz spectrum during the 5G auctions. This puts the company in a very unique position to offer 5G services using the sub-GHz band, which its competitors cannot. Offering 5G services with the 700 MHz band can potentially help Jio gain a 4% to 5% subscriber market share. Further, Jio will be able to deliver 5G in rural areas at a 50% lower cost than the other telcos because it has sub-GHz airwaves, something that Airtel and Vi won’t be able to do right now," Rohan Dhamija, Managing Partner, Analysys Mason told TelecomTalk.
Airtel and Vodafone Idea will have to spend more money on setting up towers and small cells for 5G in rural areas, while Jio can do it at a very low cost because of the high coverage advantage that the 700 MHz band will offer to the telco. Both Airtel and Vi are already using the sub-GHz spectrum for offering services to 2G/4G customers. They won't refarm that spectrum for 5G right now, meaning Jio will be the only telco that will be able to use the sub-GHz spectrum for offering 5G throughout India.
According to Dhamija, because of the 700 MHz band in its portfolio, Jio will be able to deliver better indoor coverage services in highly populated areas/cities such as Chennai, Bangalore, Pune, etc. This will help the telco in gaining subscriber market share.
700 MHz Spectrum will Help Jio in Delivering Better 5G SA Services
Jio will also be able to utilise the dedicated 700 MHz spectrum in two to three years' time for delivering 5G SA (standalone) services. This will boost the telco's brand in the enterprise market. As per Dhamija, this would contribute to a market share gain of up to 5% in the 5G enterprise use case market.
Do take a look at the complete spectrum sheet that reflects the purchases Jio made during the spectrum auctions 2022.