Can Jio Lead 5G Market War?

After the 4G mania is settling down, operators worldwide are preparing themselves to the next generation networking capabilities which is also known as 5G ( 5th Generation ) Network. With the entry of Reliance Jio in 2016, there is a crushing and aggressive competition in the market of Data and Mobile Networks. Hence, it is no surprise that all the major operators are spending substantial amount of money, time and efforts to improve their stance and status by preparing themselves for upcoming 5G network domination in India.

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But the question is how prepared are the telcos to take a lead? Few reports are coming in which indicates Reliance Jio might be current leader in this race. SBI Cap securities has released a statement indicating Reliance Jio Infocomm is likely to launch 5G services by the second half of 2020, accelerating its rollout to stop rivals Vodafone Idea (VIL) and Bharti Airtel. The brokerage said Jio’s move to fast-track 5G plans is likely driven by mega fundraising plans lately announced by VIL and Bharti Airtel to enhance 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.

Bharti Airtel and VIL are expected to raise as much as Rs 50,000 crore from their planned rights distribution and tower asset sales. This move 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,” said Sharma.

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.