With 5G rollout possible within months, the Indian telecom sector may further consolidate market share, says global brokerage firm Credit Suisse in its report. It said that the roll-out would precede meaningful 5G adoption in India given the nascent handset ecosystem.
The two leaders in the telecom market – Bharti Airtel and Reliance Jio to front-load 5G capex by FY27 and estimated subscriber penetration to reach around 55 per cent, which shall be slower than the adoption of 4G, the brokerage further stated.
Credit Suisse expects Jio to roll out an SA 5G network, whereas Airtel will adopt NSA 5G rollout on 3.5GHz band initially.
It further noted that the market repair for Indian telcos may continue, with further consolidation as Airtel and Jio gain market share from Vodafone Idea given their expected head-start in 5G investments (capex front-loading).
Currently, Indian telcos derive most of their enterprise revenues from connectivity services such as data and voice). The 5G enterprise use cases are still evolving globally and provide an upside optionality, the global brokerage firm also pointed out.
Stating that Airtel is one of the key beneficiaries with 5G roll-out, Credit Suisse said the company stands to benefit from industry repair, organic growth and market share gains from Vodafone Idea with its premium positioning and comfortable leverage (2.9x).
Reliance Jio has earmarked Rs 2 lakh crore investment for 5G network and plans to launch the high-speed services in key cities by Diwali, RIL Chairman Mukesh Ambani said on Monday while speaking at Reliance Industries’ 45th annual general meeting.
“To build our pan-India true 5G network, we have committed a total investment of Rs 2 lakh crore. Jio has prepared the fastest ever and most ambitious 5G rollout plan for a country of our size. Within the next two months. That is by Diwali, we will launch Jio 5G across multiple key cities including metro cities of Delhi, Mumbai, Chennai and Kolkata,” he said.
