Reliance Jio will speed up 5G deployments to keep ahead of competitors

Jio currently operates a 4G VoLTE network in India with 215 million subscribers. (Reliance Jio)

India-based wireless carrier Reliance Jio will likely quicken the pace of its of 5G services rollout to take advantage of its lead against competitors, according to a note from SBI Cap Securities this week. The move is expected after rivals Bharti Airtel and Vodafone Idea Limited (VIL) announced plans to raise capital for improving 4G capacity, according to a news report from The Economic Times.

Jio currently operates a 4G VoLTE network in India with 215 million subscribers, which has given the company a leg up over rivals in 4G, particularly in rural markets. In the first 25 months of operation, Jio was able to capture an impressive two-thirds of the 4G subscriber market in India. Its subscriber base could reach 400 million by 2020, according to analyst estimates.

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Bharti Airtel and VIL are hoping to raise enough capital to upgrade their respective 2G subscribers to 4G.

“If most funds raised by VIL and Airtel are deployed in expanding 4G capacity, they could together claim 425 million subscribers, sufficient enough to upgrade all their existing 2G users to 4G, which would make it tough for Jio to gain more market share,” said Rajiv Sharma, co-head of research at SBI Cap Securities, in an investor note.

Jio is eager to participate in a 5G spectrum auction in India, which Sharma predicts could take place as early as January 2020. Both VIL and Bharti Airtel have argued the 5G sale should be pushed back a year.

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If Reliance Jio is able to push ahead with its 5G plans, Sharma said, it could render Bharti Airtel and VIL investments in 4G “irrelevant.”

“Jio’s early move to 5G is inevitable to sustain market share gains, and we see it selectively deploying this next-gen wireless broadband technology by the second half of 2020,” Sharma said.

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