KOLKATA: Reliance JioInfocomm is likely to launch 5G services by the second half of 2020, accelerating its rollout to stop rivals Vodafone Idea (VIL) and Bharti Airtel from gaining scale in 4G segment and benefitting from any 4G-led data monetisation, said SBICap Securities.
The brokerage said Jio’s move to fast-track 5G plans is likely driven by mega fundraising plans recently announced by VIL and Bharti Airtel to boost 4G capacities.
Rajiv Sharma, co-head of research at SBICap Securities, said he expects the government to auction 5G spectrum by January 2020. Jio is the only telecom operator which has backed an early sale of 5G airwaves. Both Bharti Airtel and VIL have opposed an early auction.
Sharma said he expects Jio to make “a decisive 5G upgrade next year to make competition from Airtel and VIL on the 4G front irrelevant, in its bid to maintain leadership in fast broadband technology, thought and revenue market share fronts”.
Since Bharti Airtel and VIL are expected to raise as much as Rs 50,000 crore from their planned rights issues and imminent (tower) asset sales, both incumbents could narrow the gap with Jio in 4G services in all key urban markets. “Jio’s early move to 5G is inevitable to sustain market share gains, and we see it selectively deploying nextgen wireless broadband technology by the second half of 2020,” Sharma told ET.
According to experts, fundraising and balance sheet repair by Bharti Airtel and VIL is not good news for Jio. Sharma said, “If most funds raised by VIL and Airtel are deployed in expanding 4G capacity, they could together claim 425 million subscribers, sufficient to upgrade all existing 2G users to 4G, which would make it tough for Jio to gain more market share, post 9-12 months.” SBICap Securities also expects Jio to accelerate its home broadband deployments in urban centres and leverage its cable TV investments.
