Airtel in no rush to implement 5G network 

Overview of 5G market in India

The Indian 5G market is expected to develop at a compound annual growth rate (CAGR) of 43.8% from 2023 to 2031, from its 2022 valuation of USD 7,065 million to USD 1,78,546.1 million by 2031. India is the fourth largest market for 5G phones, with a 14% share in the June quarter, according to reports. India is currently in the early stages of adopting consumer 5G services, with 18% of mobile customers expected to use the technology by 2025.

Speaking about the landscape of 5G services in the Indian telecom sector, Jio has the largest 5G client base whereas, Airtel’s 5G network is now accessible in a number of states, with ambitions to extend nationwide soon. Additionally, Vodafone Idea plans to deploy its 5G services in the near future.

Reliance Jio, India’s telecom market leader, is the only telco that has chosen a 5G SA network – in which all of its infrastructure or cell sites broadcast solely 5G signals – from the start, in 2022, after investing in efficient but expensive sub-GHz 5G airwaves in the 700 MHz range. Airtel, on the other hand, chose a non-standalone 5G network that makes use of existing 4G network infrastructure and airwave resources, resulting in far lower capital expenditure than Jio.

Recently, Bharti Airtel has announced plans to move its 5G services to a standalone (SA) network in one or two cities within three years, albeit they would continue to use non-standalone (NSA) mode due to high 4G traffic. The shift’s goal is to use mid-band spectrum and create sustainable monetization applications for 5G technology.

Airtel to delay 5G Standalone

Bharti Airtel plans to transition its 5G services to a standalone (SA) network from the non-standalone (NSA) mode in one or two cities over the next three years. However, India’s second-largest telco still has a high volume of traffic on its 4G bands and that switching modes provides no tangible benefit to subscribers.

The executive lamented that, even after three years of debut, 5G has yet to generate any new revenue streams for telecom operators in India or elsewhere in the world, with speed remaining the only differentiation from 4G.

Reasons for delaying boarding the 5G wagon

Transitioning to SA involves a considerable expenditure, estimated at Rs 30,000-40,000 crore, primarily for the acquisition of sub-GHz spectrum. Airtel prefers to wait for 4G spectrum bands to progressively clear as traffic shifts to 5G.

Furthermore, 5G network utilization is currently low, with Airtel focusing on expanding its 4G network to convert remaining feature phone users to smartphones. This poor utilization does not justify the immediate deployment of 5G infrastructure. In terms of technological and strategic factors, Airtel is deploying non-standalone (NSA) 5G infrastructure that uses current 4G infrastructure. This arrangement is inexpensive and enables devices to smoothly move between 4G and 5G networks. Airtel intends to move to SA over the next three to four years as demand grows and more people upgrade from 4G.

In terms of monetization challenges, 5G services now have limited monetization prospects, making rapid expansion less appealing. Airtel is pushing the conversion of 4G consumers to 5G services, which cost more. Airtel plans to transition its Fixed Wireless Access (FWA) services to SA by December 2024, adopting a deliberate approach to deploy SA for certain use cases rather than a full-scale implementation.

Thus, currently, SA has no benefits for Airtel as there are no applications that capitalize on the technology. It was anticipated that in three years, networks would emerge in one or two places with plenty of spectrum and increasing traffic with customers not likely noticing the difference between SA and NSA.

The image added is for representation purposes only