Bharti Airtel, which has so far maintained that it will take two to three years for the 5G ecosystem to get ready in India, seemed to have had a change of heart, going by its latest statement on the upcoming wireless communication standard.
Giving details of the ‘first ever successful demonstration’ of 5G on a commercial network in India, the telco said its customers will be able to experience “the full impact of 5G..when when adequate spectrum is available and government approvals received”.
This is a departure for its earlier stance that it made no sense to think of deploying 5G in India at present due to two factors — lack of 5G handsets and services in India, and the high price of spectrum proposed by the regulator.
For example, speaking at last month’s India Mobile Congress, Bharti Airtel Chairman Sunil Mittal said India will take “two or three years” to become “ready to receive the benefit of the investment that the globe would have made onto the 5G standard and 5G ecosystem.”
In other words, unlike rival Reliance Jio, Bharti wants to (wanted to?) wait for 5G equipment prices to come down before purchasing and deploying it on its network.
This made sense given that 5G technology is still very new, any operator that buys 5G equipment now will end up paying an ‘early adopter premium’. Prices will come down substantially in the next 2-3 years.
However, minutes after Mittal made the statement, Mukesh Ambani, chairman of rival Reliance Jio, reiterated his commitment to launching 5G services in India later this year.
Subsequently, it has also been revealed that Jio is at an advanced stage of readiness to deploy 5G using an internally developed suite of 5G network equipment and software. The company will more or less certainly launch 5G services later this year if the government conducts a 5G spectrum auction around June or July, as is expected.
Even though Jio too has made a strong appeal to the government for more rational spectrum prices, if it does go ahead of buy spectrum at current prices, it would leave Airtel will little option but to follow suit.
Moreover, chances are that the government will significantly reduce 5G spectrum prices in its second auction, citing low demand for airwaves in the first auction in March.
Bharti Airtel has already paid a huge price for underestimating Ambani’s determination and capability to bring about a wholesale transformation in the market when it failed to anticipate the scale and success of Jio’s 4G roll-out five years ago.
With that deployment, Jio managed to dislodge incumbents like Vodafone, Idea and Bharti Airtel and emerge as India’s largest and most profitable telecom company in a matter of just four years, even as the incumbents were ‘waiting for the 4G market to mature’.
In addition, the dynamics of pricing in the 5G equipment market is quite different from those witnessed in earlier generation technologies.
In case of 5G, all the three main telecom companies — Jio, Airtel and Vodafone Idea — have set up their own network solutions units to try to come up with an internally developed solution using off-the-shelf hardware and software, instead of relying on readymade boxes from vendors.
Because of this, it may not make sense to wait for equipment prices to fall, as creating an internal solution from scratch would cost about the same whether one does it now or after two or three years.
CHANGE IN TONE
In its latest statement announcing the conclusion of the first 5G demonstration on a commercial network in India, Airtel said the experiment proved that the company’s back-end is ready for deploying 5G.
The latest experiment was conducted by diverting part of Airtel’s 4G spectrum in the 1800 MHz band to deploy a non-standalone 5G network. Non-standalone 5G refers to 5G deployment using an existing 4G network for control functions, while 5G NR is exclusively focused on the user plane.
“Airtel 5G is capable of delivering 10x speeds, 10x [reduction in] latency and 100x concurrency when compared to existing technologies,” Airtel said, describing the test. “Specifically, in Hyderabad, users were able to download a full length movie in a matter of seconds on a 5G phone.”
CEO Gopal Vittal, who had earlier pointed out that it made little sense to invest in 5G before the entire ecosystem is ready, today made it clear Airtel is willing to take a proactive role in achieving that outcome.
“We believe India has the potential to become a global hub for 5G innovation. To make that happen we need the ecosystem to come together – applications, devices and network innovation. We are more than ready to do our bit,” he said.
Besides Airtel and Jio, Vodafone Idea too has done some work on integrating and deploying technologies that are expected to play a crucial role in 5G networks, such as Massive MIMO and OpenRAN.
However, it remains to be seen if Vodafone Idea is able to buy the required quantity of 5G spectrum to launch a network, given that it has been saddled with enormous quantities of debt due to an unexpectedly harsh Supreme Court judgment last year.