NEW DELHI: Bharti Airtel<\/a> won’t be bidding for the 700 MHz band in future auction as its current spectrum<\/a> holdings along with the new airwaves that it bought in the just concluded airwave sale are together enough to offer quality 5G services<\/a>, senior company officials said. This was also the reason why India’s second largest telco didn’t bid for spectrum in the 700 MHz band in the recent auctions, the officials added.
Analysts from brokerage houses such as BoFA Securities, Nomura<\/a>, UBS<\/a>, Goldman Sachs<\/a> and Edelweiss<\/a> have in recent reports stated that Airtel<\/a> could be forced to buy the more expensive 700 MHz spectrum in the next auction to counter Jio<\/a>, which has bought spectrum in this band. The 700 MHz band could help Jio offer better speeds indoors and hence poach high-end users from Airtel, said these reports
But Airtel executives disagree. \".. it does not make sense for us to buy 700 MHz,” a company official told ET. “Simply put, experience is no different. Ecosystem (around 700 MHz band) is less evolved, capex is higher, operating cost is higher, because there's more energy required for the cell sites.”
Commenting about its battle with Jio over 10 MHz of spectrum in the 1800 MHz band in UP (East), which resulted in the auctions lasting for a week, an Airtel executive said the company fought till the price reached the level of the 900 MHz band. “The price we finally exited was Rs165 crores. The price of 900 MHz band was also Rs160 crores, so there was no point in going beyond that. It had to be at the right price,\" he said. Jio bagged 10 MHz in the band in UP(E) for Rs 1,646 crore.
Airtel is initially planning to roll out 5G<\/a> services through what is called the non-standalone (NSA) mode. The 5G NSA mode straddles existing 4G infrastructure such as mid-band spectrum (1800 MHz, 2100 MHz bands) with the 3300 MHz band, to offer 5G speeds. This mode is globally accepted as the necessary step before transitioning into a 5G standalone (SA) era where all infrastructure – cell sites etc – transmit only 5G signals, which is the called the standalone mode.
Brokerage ICICI Securities has described the SA mode as a superior version of 5G.Some experts say while SA mode has a simpler architecture and allows telcos to serve enterprises better, the use case-- especially for India--, and the handset ecosystem around the 700 MHz band are yet to mature. Eventually though, all networks will move to SA, once most of the traffic moves to 5G from 4G and all devices support all modes and bands and Voice on 5G becomes mature, which could take over four years.
“In our rival’s (Reliance Jio) case, they cannot offer NSA, because they don't have enough mid-band. They don’t have a choice but to offer SA, which means you go and spend Rs 40,000 crore and buy the 700 MHz band,” one of the Airtel executives said. “In our case, we have the option of offering NSA because over the last five years, we have bought 25-30 MHz of mid-band holdings through auctions, and trading. We can actually move to SA in a path that is far more sensible, and yet deliver the same experience.”
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