Airtel has launched 5G at one of its stores in Hyderabad on a non-standalone network basis utilizing its existing 4G network on 1,800MHz.
The idea is to showcase its capabilities in 5G and push the 5G ecosystem of app, content, and services. There is no incremental Capex as it would over time offset 4G Capex and part of the investment would be fungible.
“We think 5G deployment for commercial use is still more than a couple of years away as spectrum availability and ecosystem development would take much longer, while 4G still has a long way in fulfilling its true potential,” Motilal Oswal Institutional Equities said.
Airtel has demonstrated its 5G capability in labs. Airtel has demonstrated the same over a commercial network. In Hyderabad, the service has gone live in Airtel stores. The company is 5G ready across all domains. Once government approval is received and there is adequate spectrum available, it can be rolled out to consumers.
The company has covered 400,00 villages with 4G network. Now, the network is 5G ready. Incremental Capex for 5G would be offset by 4G capex, so the same would be limited.
So far, Airtel’s 5G is only available for testing at its own stores in Hyderabad. Airtel needs permission to provide 5G service to customers. In labs, latency and speed is 10x better than 4G, with 3Gbps speed achieved. During the live demonstration, Airtel achieved a speed of 300Mbps.
In the first phase, Airtel needs a larger chunk of spectrum, which is available in 3.5GHz, to deploy on a non-standalone (NSA) network, which would be the best approach for deployment. Airtel can start 5G operations without 3.5GHz spectrum. But the latter would play an important part as the true power of 5G would be achieved only with good quantity of 3.5GHz spectrum.
Airtel has a high presence in mid-band spectrum. It has a large chunk of spectrum between 1,800MHz and 2,100MHz. It also has sub-Giga band spectrum in almost all circles, except in 7-8 circles, which can be over time re-farmed for 5G.
NSA deployment can be better as it would complement its 4G network. Standalone (SA) network rollout would require a new core. So, initial deployment would be on NSA and then for certain pockets it would be deployed on a SA network.
Ericsson is partnering with Airtel for 5G network implementation. It is partnering with multiple handset OEMs for devices. Airtel has used smartphones from OPPO Reno5 Pro and OPPO Find X2 Pro for the 5G trials.
The launch of 5G would happen only when a true 5G experience can be delivered. This would be dependent on availability of reasonable quantities of spectrum in the 3.5GHz band. It can also be implemented by re-farming lower spectrum bands, but it would be premature to do so at this point of time given the readiness of 4G v/s 5G at present. If and when enough quantity of spectrum in the mid-band is available, then it can be rolled out in a matter of months.
Airtel already has 1 million 5G ready phone customers on its network, with a handset cost of INR 20,000. However, prices should be in INR10-15,000 range for the masses to adopt this technology. The company would be working with all device partners to bring 5G devices to India at affordable prices.
O-RAN is one of the ways for 5G deployment. Airtel is trying open RAN and is engaged with strategic partners. It is happy to adopt other technologies that offer the best experience at lower cost.
ARPU in India is very low and needs to rise to INR200 and then to INR300. Airtel’s 5G business has the potential to improve ARPU.