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5G race heating up between Jio and Airtel

Reliance Jio is aiming to hit a minimum of 100 million 5G customers by the end of financial year 2024 (FY24) by covering all cities and over 6,000 tehsils. Sources working on the roll out say the goal is to reach 100 per cent coverage in these locations by December.

Currently, Reliance Jio offers 5G services in 240 cities. Jio currently has a total subscriber base of 423 million. In the effort to appeal to more customers to switch to 5G, Jio (and rival Bharti Airtel) have refrained from charging any premium over their 4G tariff.

A Reliance Jio spokesperson declined to comment on the issue. The roll out of 5G services began last October and within five months the figure reached 20 million subscribers jointly for Jio and Airtel.

Airtel is lagging behind its rivals. It has managed to cover a lower number of 90 cities. One of the reasons, sources in Airtel say, is that the company wants to ensure 25 per cent minimum coverage before it announces a launch in a city.

In an analysts’ call, Airtel said that 90 cities will rise to 300 by the end of March 2024.

Its focus is on cities where demand and consumption of 4G is high and customers are likely to shift to 5G.

The two rivals’ strategy differs because their customer bases are different. Jio’s entire customer base of 423 million is made up of 4G customers, with no legacy 2G or 3G customers. The target is moving this 4G base to 5G.

In contrast, Airtel has far fewer 4G customers, around 216 million, which is half that of Jio. The remainder comprises 2G (the total sub-base is 332 million). Airtel CEO Gopal Vittal has said the company is concentrating on shifting the heavy users of 4G to 5G.

The ecosystem for mobile devices in the country is also growing. According to conservative estimates by the India Cellular and Electronics Association, there are already 110 million 5G enabled phones with customers and this year about 50 per cent of the phones shipped will be 5G-enabled.

Over 200 models of 5G-enabled phones are available from various mobile device makers.

Research agencies such as Omdia have projected that India’s 5G subscribers should go up to 369 million by 2026. GlobalData pegs it lower, at 329 million, which is around one third to a fourth of India’s subscriber base.

Based on revenue trends, GlobalData anticipates that 5G services will generate $9 billion, that’s equivalent to 37.7 per cent of total mobile revenues. Business Standard

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