Reliance Jio commits Rs 2 lakh crore capex on 5G
News: To build its 5G network, Reliance Jio has committed a total investment of Rs 2 lakh crore and roll out pan-India 5G by December, 2023 beginning with major cities in October, 2022.
View: We highlight that the company has spent ~Rs 88000 crore in spectrum and remaining capex of ~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 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) stack 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 met success.