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Cash-strapped Vodafone Idea is still in talks with European vendors for 5G contracts, people familiar with the matter said. They added that the loss-making telco will initially place orders for circles where it has revenue market share of 15% and above, which are metro plus category circles.
Notably, European vendors are set to supply mobile telephony equipment to the Mukesh Ambani-led telco for the first time. Jio has so far worked with just Samsung for its 4G network. Samsung, on its part, will be supplying mobile telephony network gear to Airtel for the first time.
While Airtel is expected to place an order of 15,000-20,000 5G sites in the initial phase to cover bigger cities, Jio is expected to place a much bigger order to cover more cities than its rivals, the people said.
Both Airtel and Jio though are yet to place purchase orders (POs) for network equipment, which will be basis their final 5G spectrum winnings and subsequent allotments.
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A senior executive at Bharti Airtel separately confirmed deals to Nokia, Ericsson and Samsung. “Airtel will give purchase orders to all vendors,” the executive said.
In order to ensure that Airtel is able to get the best 5G equipment costs, it has also finalised Korean vendor Samsung along with its long-standing partners Nokia and Ericsson.
One person added that both Huawei and ZTE will also be phased out from Airtel’s 4G network, to be replaced with the three vendors.
“Jio has managed to secure a rate from Ericsson, which is even lower compared to Airtel,” one of the people privy to the discussions said, adding that final contours are being discussed currently.
A third source said that backward integration with gear from European vendors is possible with Samsung’s 4G, hence Jio is opting for 5G equipment from the latter.
“Nokia and Ericsson’s 5G gear is better than those of Samsung in terms of performance quality,” he said, adding that European vendors are aggressive in terms of trading margins to get entry into Jio’s network.
Sources said that Jio may in fact place a significantly bigger purchase order with Swedish telecom gear maker Ericsson, compared with Nokia and Samsung.
Both telecom operators will initially focus on urban and dense population areas with their respective commercial 5G services. “Jio is expected to be more aggressive as it plans to cover the entire population in the next 3-4 years with its 5G,” the third person said, adding that the telco will deploy a lot more 5G sites this fiscal than Airtel.
A senior executive at a European vendor said that the company is ready to start work once the PO’s are signed. “They are just waiting for the auction to be done.”
India’s first 5G spectrum auction started on July 26 with four participants—Reliance Jio, Bharti Airtel, Vodafone Idea and Adani Data Networks (an Adani Group unit). A total of 72 GHz of 5G airwaves across 10 bands—600 MHz, 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz, 3.3-3.67 GHz and 26 GHz—are up for grabs.
“Once the auction is over, the POs issued, it will take another 3-6 months for the equipment to be installed and the network to be set up,” said an industry executive.