The use of communication has now turned out to be one of the most significant aspects as technology continues to expand its growth. One of the most notable trends in this sphere is the activation of 5G networks, which open the prospects for incredible high speed, low latency time, and a huge number of connected devices.
India’s two giant telecom companies, Reliance Jio and Airtel, are leading this technological change. However, a number of the latest reports suggest that both are taking a conservative attitude towards the next step in furthering their 5G network. The following article examines why this sustainable speed was set and the current and future state of Reliance Jio and Airtel.
Understanding the Current Landscape
It also reveals that the 5G deployments at Reliance Jio and Airtel are still rather slow because of several issues. Although Reliance Jio and Airtel has successfully expanded its foray into establishing 5G networks, the usage of the networks has remained low, and hence, the new attempt aimed at capitalizing on the 4G users.
The move is deliberate—targeting to migrate current mobile broadband/4G users to the 5G network to increase the cash-generating capacity.
Currently, Reliance Jio and Airtel has the additional utilization of 5G networks, which is about 15%. This growth starkly differs from initial plans to roll out 5G nationwide. Despite having coverage reaching 60 percent of India’s population, Jio has, therefore, been unable to achieve major monetization of its 5G infrastructure as the applications for the technology are still limited.
Similar to its rivals, Reliance Jio and Airtel also has a strategy to increase its 4G services for users stuck on a feature phone to jump to a smartphone, which is why it is not in a rush to release 5G services.
Need-Based Expansion Strategy
In my perspective, Reliance Jio and Airtel have demonstrated a ‘need-based expansion’ attitude that can explain the spirit of their expanded strategies. This idea is centered on expanding the network’s possibilities only when necessary to cover the definite need for connection services.
Thus, for both companies, numerous barriers to higher industry adoption remain valid, weak use cases to explore new value propositions leading to stronger monetization checks are still evident, and, therefore, there is a need to prioritize resources.
As for the case of Reliance Jio and Airtel, its core market resides in the elevation of its existing 4G customers to 5G services, but this migration is not a matter of happening in a single blink of an eye while trying to transition millions of users from 4G to 5G involves infrastructure expenditure, it also requires awareness creation and usage encouragement. This transition will take time, and the focus lies on utilizing the current infrastructure before expanding more 5G network infrastructures.
Market Dynamics and Competition
There are two contrasting but equally important factors in comprehending the strategies of the two Indian telecommunication organizations: competition. Analysts think Airtel may increase 5G expansion pressure on Jio as rivals stroll into the market. Currently, Jio enjoys gross user superiority and has network overcapacity, which decreases the imperative of active 5G development.
Equipment Suppliers and Investment Delays
Nokia and Ericsson among Reliance Jio’s key suppliers have also pointed to the fact that future investment in 5G infrastructure will be required. Conversation better utilization of the network.
Since most consumers are not using the existing current equipment at maximum capacity, much uncertainty surrounds additional expenditure to buy new 5G equipment.
There will be little demand for more 5G kits initially, and future purchase orders for Reliance Jio’s equipment will probably be ordered in batches beginning the second year after commercial use escalates. This cautious attitude to investments indicates one more problem that exist among key market players – the rate of 5G implementation.
Capital Expenditure Constraints
The other important determinant in the current strategy of Reliance Jio and Airtel is its capex consideration. The firm’s top management has disclosed that its capex has already hit its apex, and it expects it to decline in the future years. Most of it has been attributed to the fact that it completed its 5G deployment across the country and has additional capacity beyond this.
The management of Reliance Jio understands that unless viable revenue streams are developed, investment in 5G technology might prove costly for the company. The growing number of customers interested in the 5G-based fixed wireless access service, which is known as Jio AirFiber, may cause the need to develop further 5G networks in the future.
Shifting Focus to 4G Users
Since Reliance Jio and Airtel is still experiencing high subscriber traffic on the new 5G infrastructure, it is directing its optimization efforts at improving the satisfaction of its existing 4G subscribers.
Therefore, migrating these users to the 5G network is attractive to Reliance Jio, as it can expand subscribers and generate increased revenues. The telecom giant understands that for it to properly capitalize on the possibilities of 5G, it has to first and foremost ensure proper migration of its current user base to the new standard.
This shift is important for generating additional revenue and building the proper groundwork for subsequent uses of the 5G network. Finally, with normal transitions from 4G users to 5G, it will construct a large demand for network capabilities, forcing Reliance Jio to reconsider its expansion strategies.
The Role of Consumer Education
Firstly, for Reliance Jio and Airtel, the top priority is to build consumer awareness of the advantages and characteristics of 5G technology. Many users still have no idea what 5G has over 4G regarding data transmission, faster speeds, and intro latency. Through funding-related informational campaigns, both clients would be assured of higher adoption of 5G services, thus enhancing network traffic.
This means the current marketing campaigns, customer relationship programs, and policies will be used to popularize Reliance Jio’s 5G services. With the examples mentioned above showing the advantages of 5G, the company intends to encourage its 4G users to upgrade to the newer network usage and increase traffic on its networks.
Future Outlook for 5G Expansion
Presently, Reliance Jio and Airtel are quite careful about the roll-out of the 5G networks; the future phenomenon can be quite diverse. Since competition rises and consumer demand increases with the need for enhanced services, both these firms may be pressured to further their 5G plans.
Many analysts think that with the increasing popularity of practical applications of 5G, such as gaming on the go, smart city projects, and IoT uses, there will be increasing volumes of demand for faster internet speeds. Such evolution may eventually force Reliance Jio and Airtel to reconsider their current policies and more actively develop the coverage of 5G networks.
Conclusion
This attitude of restrained incrementalism is attributed to low adaptive capacity, lack of demand, and, therefore, the need to build market awareness for 5G amongst consumers, as well as the prevailing macro-market conditions in which Reliance Jio and Airtel have to operate.
This way, both companies are trying to establish a foundation for future growth while aggressively pushing existing 4G users to convert to 5G services and managing infrastructure investments.
Reliance Jio’s focus on the need-based telecom expansion strategy is quite reasonable and realistic in today’s telecom environment and the situation with the preparations for 5G implementation worldwide.
The current trends for expansion may be slower, but the potential for fast growth still exists because of consumers’ demand for bandwidth, which would require innovative connectivity technologies. Having a bright future ahead, Reliance Jio and Airtel will be focused and capable of managing the progressive changes occurring within the telecommunication sector.
To gain more insight on Indian telecom market, read here ” For the latest in 5G technology rollout, keep updated with Economic Times – 5g Network Deployment In India
