Jio's 5G splurge: A question of strategy

Unlike its rivals, Reliance Jio appears to be banking on developing new-age use cases to monetise its large investments in the recent auctions

- SURAJEET DAS GUPTA

It came as a surprise to all stakeholders competing I most analysts and even the government's internal projections on revenues from the 5G auctions.

Last week, Reliance Jio disrupted all calculations by paying a stiff ₹40,000 crore to buy 10 MHz of spectrum in the 700-MHz band, globally considered a key band for efficient 5G service coverage, along with the default 3.5 GHz band and the ultra-high speed and low-latency millimetre band of 26 GHz band.

So what made Jio pay almost 45 per cent of its total spend in this auction for the 700 MHz band much more than what it rustled up even for the 3.5 GHz band? Especially when rivals Bharti Airtel and Vodafone Idea stayed away from this band? As some analysts pointed out, Reliance Industries, of which Jio is a subsidiary, has the cash to splurge and hold spectrum, resources that competitors may lack. In FY22, Reliance's cash reserves and surplus were ₹464,762 crore against Airtel parent Bharti's ₹64,000 crore.

But the explanation for these contrasting spends also lies in differing strategies. Jio is expected to set up a standalone (SA) independent 5G network, which a few telcos in the world have done. This means the radios, which enable the wireless interface, and the core (or 5GC, which controls the network) will be run on a 5G platform.

Jio's rivals, on the other hand, are opting for a hybrid model, also called non-standalone (NSA) 5G, that will continue to use and share the 4G core. They can also fall back on their existing spectrum to get reasonable coverage.