Jio leads 5G rollout, Airtel prone to market share loss

Bharti Airtel’s 5G network rollout has been more “measured” and lags behind its biggest rival Reliance Jio, according to an analyst report.

Analysts at investment services provider JPMorgan in the report said the measured coverage could prompt a higher capital expenditure over the next 12-18 months by Bharti Airtel, which could face potential market share losses if the coverage gap is not closed.

“Bharti Airtel lags Reliance Jio in most metrics across circles, suggesting a modest relative pace of roll-outs across 21 circles, implying higher capex risk and potential market share losses if not closed,” the report said.

The study, based on the analysis of a recent OpenSignal report, mentioned that 5G BTS rollouts in India have gathered pace in 2023, with 2,53,000 deployments till June 19.

Equity research firm Jefferies in its analysis of subscriber data released by the telecom regulator Trai for April said that expanding subscriber base was led by Jio’s 4.7 million active subscriber additions, while Bharti’s active subscriber adds were a touch soft at 0.7 million- the lowest in the last six months.

“Jio’s active subscriber additions at 16.3 million have been 3 times of Bharti’s 5.3 million subscriber additions. Additionally, Bharti continues to gain market share among 3G and 4G subscribers. Jio’s active subscriber leadership and Bharti’s 3G and 4G market share gains bode well for tariff hikes,” Jefferies said.

According to the report, VIL’s 3G and 4G subscriber losses indicate pressure on its 4G subscriber base and could result in accelerated market share shifts towards Jio or Bharti over the next few months.

On 5G availability, the JP Morgan report mentioned that Jio’s users are connected to 5G, 37% of the time against just 14% for Bharti Airtel.

5G availability in Bharti’s top circles by revenues also lagged Jio by similar levels (36% vs Bharti at 13%).

In terms of 5G reach – which means the average proportion of locations where consumers are connected to a 5G network out of all locations visited – Jio is at 4.2 against Bharti Airtel’s 3.4, with the Mukesh Ambani-group company leading in 21 circles, the report said.

“Jio also leads Bharti on 5G download speeds at 323 Mbps vs Bharti at 258 Mbps nationally and in most circles,” the report said while attributing data to Opensignal.

“Bharti’s weaker 5G stats (Availability, Reach) suggest a network gap and need to accelerate 5G capex,” it added.

Bharti is also rolling out 4G BTS in 60,000 villages where it lags Jio on coverage, in addition to its 5G capex for RAN and backhaul, it explained.

Another report by brokerage Emkay also highlighted that Reliance Jio, which has committed to a $25 billion investment in 5G, is relatively ahead of peers in preparing for fixed wireless access deployment.

FWA technology is expected to give geometric rise in the 5G subscriber base but it has been unable to pick up the pace because of the high cost of devices that are required to deploy it.

FWA would be an important leg of 5G monetisation, as it could give telcos easy entry to homes if priced right; also, telcos could then upsell content, IoT etc, thus improving their topline, analysts at Emkay said in the report.

For RJio, wider 5G coverage, availability of wider-spectrum bands including 700 MHz, improved fibre infrastructure for backhaul and in-house FWA technology with the Mimosa acquisition may give the first mover advantage in the FWA segment, analysts said.

Bharti Airtel may be able to counter RJio in FWA as it is also expanding its 5G coverage at a fast clip, adding 35-40 cities daily and can also re-farm 900MHz and deploy it to counter RJio’s 700 MHz, the report said.

Airtel too is conducting several experiments and pilots for FWA, it stated.

“FWA is a Rs 205 bnpa (Rs 20,500 crore per annum) opportunity, assuming ARPU of Rs 570 and access to 30 million homes,” the report said. PTI