Bharti Airtel\u2019s capital expenditure (Capex) in 5G standalone (SA) is expected to be staggered in the absence of an immediate need to invest in this network architecture, according to research agency S&P Global Ratings. <\/p>\n
The Sunil Mittal-led telco\u2019s fifth-generation wireless network has been deployed nationwide using the non-standalone (NSA) architecture, which uses a 4G core. This contrasts with rival Reliance Jio\u2019s 5G network, which is underpinned by the standalone architecture.<\/p>\n
Standalone is crucial for enabling some of the modern 5G features, such as network slicing and Reduced Capability (RedCap) IoT, which can enable telcos to deliver more enterprise-focused applications and drive monetisation. <\/p>\n
\u201c…at least from Bharti Airtel\u2019s point of view, we think that the Capex for standalone, which will arguably be more costly, should be more gradual and phased due to the lack of an imminent need to deploy huge capital there,\u201d Ker Liang Chan, associate director \u2013 corporate ratings at S&P Global Ratings, told ETTelecom on Thursday during an online roundtable, following its recent rating action for the Sunil Mittal-led operator.<\/p>\n
He added that Airtel\u2019s Capex is expected to ease, underlining that the telco has employed a dual-mode strategy, i.e., investing in both NSA and SA in regions where it considers fit to deploy the capital. <\/p>\n
On Monday, the ratings agency upgraded the Gurugram-headquartered telco\u2019s long-term issuer credit rating to BBB from BBB-, on the back of the company’s strong earnings momentum and cash flow, which is expected to drive continued deleveraging over the next 12-24 months. <\/p>\n
It reaffirmed Airtel’s outlook to positive. The ratings agency also raised its ratings on the telco’s senior unsecured debt to BBB from BBB-, and upgraded ratings on its subordinated perpetual securities to BB+ and BB.<\/p>\n
Gopal Vittal, vice chairman and managing director of Airtel, said at the company\u2019s most recent post-earnings call that the telco is in the process of transitioning to 5G Advanced by introducing 5G SA alongside the existing 5G NSA. <\/p>\n
\u201cOn 5G standalone, there is really no meaningful capex, because it is all software-led. All our networks are capable of moving to the standalone at the flick of a button…it is a very tiny amount of money that we spend on software,\u201d he had said. <\/p>\n
Airtel has enabled a dual-mode 5G network, with SA, in 13 circles for FWA users. However, it is also conducting pilots for mobile network in a \u201ccouple of circles\u201d, and expects to make it commercial in the coming months as the traffic on the network grows.<\/p>\n
The top executive had said that Airtel is carrying 40% of the overall data traffic on its 5G networks, and would consider refarming spectrum for providing 5G standalone-driven mobile services.<\/p>\n
As per Sweden\u2019s Ericsson, nearly 360 telecom carriers have now launched commercial 5G services, and more than 90 of those have launched or soft-launched 5G standalone. <\/p>\n
\u2018Spectrum differential between Airtel & Jio\u2019<\/p>\n
Chan said that following India\u2019s mega 5G spectrum sale in 2022, the major differential between the spectrum portfolios of Reliance Jio and Airtel was mainly around 700MHz, which allows for wider coverage and at higher speeds, albeit it is constrained by transmission distances. <\/p>\n
\u201cThe 2024 spectrum sales had a lot more muted appetite, where \u20b9103 billion was spent collectively by the top three telcos. And essentially one-third of it was spent renewing spectrums,\u201d he added. <\/p>\n
India\u2019s telecom regulator, meanwhile, has kicked off the exercise of selling airwaves in nearly 10 bands, including the upper 6GHz band for the first time, in the next spectrum auction. <\/p>\n
Muted optimism around 5G monetisation<\/p>\n
The senior analyst said that the optimism of telcos in India, as well as the Asia Pacific (APAC), has lately become slightly dull around 5G monetisation. \u201c…it is something that, in my view, has come down in terms of optimism. Monetisation has been quite slow.\u201d <\/p>\n
Nearly three years later since commercial 5G launches, operators in India are struggling to monetise their 5G networks amidst a lack of clarity on consumers\u2019 paying power and regulatory ambiguity on spectrum for private wireless networks, along with an absence of supported device ecosystem. <\/p>\n
The telcos are instead focused on upgrading mobile users, increasing tariffs, and selling 5G FWA with bundled offerings, to drive average revenue per user (ARPU).<\/p>\n","protected":false},"excerpt":{"rendered":"
Bharti Airtel\u2019s capital expenditure (Capex) in 5G standalone (SA) is expected to be staggered in the absence of an immediate need to invest in this network architecture, according to research agency S&P Global Ratings. The Sunil Mittal-led telco\u2019s fifth-generation wireless network has been deployed nationwide using the non-standalone (NSA) architecture, which uses a 4G core. This contrasts with rival Reliance Jio\u2019s 5G network, which is underpinned by the standalone architecture. Standalone is crucial for enabling some of the modern 5G features, such as network slicing and Reduced Capability (RedCap) IoT, which can enable telcos to deliver more enterprise-focused applications and […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[8],"tags":[],"class_list":["post-975787","post","type-post","status-publish","format-standard","hentry","category-telecom"],"acf":[],"_links":{"self":[{"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/posts\/975787","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/comments?post=975787"}],"version-history":[{"count":0,"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/posts\/975787\/revisions"}],"wp:attachment":[{"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/media?parent=975787"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/categories?post=975787"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/tags?post=975787"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}