Connect with us

5G

Airtel’s overall 5G CapEx to be 50% of Jio’s, IIFL Securities

Airtel news

While data usage will also surge on higher feed density, the above capacity should be adequate until late 2025, believe analysts at IIFL Securities, with 5G handsets determining the pace of 5G uptake. Analysts at IIFL Securities estimate Bharti’s 5G outlay (including spectrum purchase in July 2022) to be ~50% of the Jio- announced Rs2 trillion 5G investment. In the medium term, Bharti’s strategy on eventual migration to 5G standalone (SA) network and rural 5G rollout — would determine its Capex trajectory.

A near trebling of data capacity in the next 12-18 months
Channel checks undertaken by analysts at IIFL Securities suggest a brisk 5G rollout by the top two telcos and a 5G location count target of 200k/150k by December 2023/March 2024 for Jio/Bharti. Their calculations suggest that the total capacity of Jio/Bharti would rise to 849/566 PB-per-day by March 2024 versus the estimated 264/232 PB-per-day in September 2022. While Bharti’s capacity jump may be lower than Jio’s, both can support similar data traffic surges, as Bharti can also use up more of its currently higher headroom (Bharti’s current capacity is ~85% of Jio’s, though data traffic only ~60%).

Capacity increase to comfortably accommodate 5G traffic
In 5G, per capita monthly data usage may surge to 40-50GB from the current ~20GB, due to higher feed density and/or unlimited-data 5G plans in the initial months for users above a given ARPU cut-off. Based on the analysis done by analysts at IIFL Securities, Jio/Bharti’s 5G capacity can support ~280mn/140mn 5G subscribers at 50GB/month by March 2024. With 65-70mn 5G handset installed base, ~160mn annual smartphone shipments (currently 35-40% are 5G enabled, but this should rise sharply) and gradual adoption of 5G plans, the above capacity is adequate until late 2025, believe analysts at IIFL Securities.

Bharti’s overall 5G capex may be ~50% of Jio’s, if it does not bid for 700MHz
Analysts at IIFL Securities estimate Jio’s Rs2trn 5G investment to be split 44%/32%/18%/6% between spectrum/BTS and radio/core and backhaul/FWA. Bharti’s outlay would be ~50% of this; it is likely to adopt a more calibrated rural 5G rollout and migration to SA from FY25 onwards. IIFL Securities

Click to comment

You must be logged in to post a comment Login

Leave a Reply

Copyright © 2024 Communications Today

error: Content is protected !!