BLOG
Jio commits Rs 2 lakh crore capex for 5G
What's Buzzing:
To build its 5G network, Reliance Jio committed a total investment of Rs 2 lakh crore and plans to roll out pan-India 5G by December, 2023.
Context
Jio has informed that it will deploy the latest version of 5G, called Stand-Alone 5G, which has zero dependency on its 4G network. With Stand-Alone (SA) 5G, Jio can deliver services such as low latency connectivity, massive machine-to-machine communication, 5G voice, Edge computing and network slicing, and metaverse. It would also be only telco to deploy sub-giga hertz spectrum, which is essential for deep indoor coverage and expects to seamlessly combine these frequencies into a single powerful 'data highway', using an advanced technology, called Carrier Aggregation. The company indicated that by Diwali, it will launch Jio 5G across multiple key cities, including the metropolitan cities of Delhi, Mumbai, Kolkata and Chennai. Subsequently, it plans to increase the Jio 5G footprint month after month. By December 2023, it expects to deliver Jio 5G on a pan-India basis.
Our Perspective
We highlight that the company has spent ~Rs 88000 crore in spectrum and the remaining capex of ~Rs 1.1 lakh crore is higher than likely ~Rs 75000 crore capex spend by Airtel in the next three years, given that SA mode needs more antennas and big radios spends. We highlight that the overall intention of Jio is to capitalise on the fixed wireless broadband opportunity and accelerate home broadband wherein its long term target is to reach 100 mn homes vs. ~7 mn currently. However, one has to see how the cost per home pass (currently at ~US$200/household vs. traditional fibre home at ~US$50) stacks up, going ahead. We do not expect any challenge in device ecosystem as its partnership with Google for 5G smartphone will fill this gap. We view 5G announcement in relatively untested mode as a parallel equivalence of 4G LTE (which was nascent) when Jio launched and succeeded.
Disclaimer – I ICICI Securities Ltd. ( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400 025, India, Tel No : 022 - 6807 7100. I-Sec is acting as a distributor to solicit bond related products. All disputes with respect to the distribution activity, would not have access to Exchange investor redressal forum or Arbitration mechanism. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. Investments in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein mentioned are solely for informational and educational purpose.
Related content
Blogs
Articles - Stocks
Advantages and Disadvantages of NPS
It is a long established fact that a reader will be distracted by the readable content of a page when looking at it...
Articles - Stocks
Advantages and Disadvantages of NPS
It is a long established fact that a reader will be distracted by the readable content of a page when looking at it...
Articles - Stocks
Advantages and Disadvantages of NPS
It is a long established fact that a reader will be distracted by the readable content of a page when looking at it...
Video
Video - Stocks
What is Book Value?
Book Value Explained – Find out what is book value in stocks in this video by ICICIdirect.com.
Video - Stocks
What is Book Value?
Book Value Explained – Find out what is book value in stocks in this video by ICICIdirect.com.
Video - Stocks
What is Book Value?
Book Value Explained – Find out what is book value in stocks in this video by ICICIdirect.com.