Vi (Vodafone Idea) has acquired 50 MHz mid-band 5G spectrum (3300 MHz band) in 17 circles and 26 GHz mmWave 5G spectrum (26 GHz band) in 16 circles for $2.3 billion to offer 5G experience as well as strengthen enterprise offerings.

Considering the fact Reliance Jio will be spending $11.1 billion, and Airtel will be spending $5.5 billion for buying spectrum, some analysts believe that Vi, the third largest telecom operator, will not be aggressive in 5G business in India.

Vodafone Idea has restricted 5G spectrum bids only to priority circles with its INR188 billion outlay during the much-awaited 5G spectrum auction. Vi purchased 850 MHz spectrum in the 3300 MHz band for Rs 152 billion and 5,350 MHz in the 26 GHz band for Rs 19 billion during the 5G spectrum auction.

However, with the significant delays in fundraising, Capex constraint, existing gaps in 4G coverage and just ~12-15 percent share of spectrum in the 5G bands), Vi’s 5G rollouts would likely lag peers and could lead to further accelerated market share gains for Airtel and Jio, Nomura said in its client note.

Some facts support the strategy of Vi. UK-based Vodafone Group, the joint venture partner of Vi, was also not keen to enter the 5G business in the initial phase.

At present, ~7 percent of the overall smartphone base is 5G enabled in India. Business houses are still talking about 5G use cases. Analysts believe that 5G rollouts would be granular, starting with metros and larger cities, Nomura said.

“We expect limited contribution from 5G revenues for the next two to three years until the ecosystem matures and widespread applications develop. We assume 5G revenue growth picking up from FY26. Apart from the already factored tariff hikes, we do not expect the 5G auction conclusion to lead to any meaningful increase in ARPU,” BofA Securities India said.

Vi acquired 5G spectrum in 17/16 circles across the 3300MHz/26GHz bands out of the 22 circles. Vi won 850 MHz in 3300 MHz band vs 2,200/2,440Mhz by Airtel/Jio and 5,350 MHz in 26 GHz vs 17,600/ 22,000Mhz by Airtel/Jio.

Vi could be at a disadvantage compared to Airtel India and Jio in the 5G business space due to lack of adequate spectrum and weaker balance sheet.

5G will be viewed as a marketing gimmick, with investments largely done to prevent churn than create a better-quality network. Vi will face the maximum risk of losing its high-end subscribers if other telecoms have better 5G networks. Vi will face 5G Capex related issues for its initial 5G rollout in urban areas as telecoms focus on SA 5G.

5G will largely be a duopoly between Jio and Airtel in the consumer space and expect both Airtel and Jio to emerge as dominant players in the consumer space with bundled 5G offerings, BofA Securities India said.