Telcos would need to invest $30.5 billion to roll out 5G services in India says UBS report

Viewpoint , September 30, 2019

As per a report by UBS, telecom operators including Airtel, Reliance Jio and Vodafone Idea would need to undertake investments worth $30.5 billion to roll out 5G services in the country.

The need for a dense site footprint and fibre backhaul in 5G is anticipated to shift the balance of power towards larger and integrated operators with strong balance sheets, as per the report.

According to UBS, Bharti Airtel may have to invest $2 billion annually or about 65 per cent of its India annual capex run-rate. However, the capex required for Jio would be lower, due to its larger tower footprint and higher proportion of towers on fibre backhaul, compared to Bharti Airtel and Vodafone Idea. Furthermore UBS suggests that the sector will be able to reduce the overall capex by 15-20 per cent if the three Indian telcos share towers and fibre.

As per UBS, Jio can transition to 5G in a time-efficient manner, considering its in-house data centres and investments into a content distribution network (CDN. The rollout will also provide an opportunity for Jio to strengthen its no consumer-based product ambitions.

As per the analysis, government may follow three footsteps to hasten the adoption of 5G. First, laying down a clear roadmap of spectrum availability and earmark frequency bands aligned with global standards. Secondly, moving away from the existing mechanism of pricing spectrum on a per MHz basis. Finally, the centre must complete the national optical fibre network rollout on a mission mode requirement of back-haul support for 5G is huge, for which existing microwave platforms will not be sufficient.


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