One of the most surprising aspects of India's 5G auction was Reliance Jio acquiring 700MHz spectrum for all 22 circles, while archrival Bharti Airtel completely ignored this frequency band.

As a result, Reliance Jio is now the country's sole owner of the 700MHz spectrum. It bought a total of 220MHz of the 700MHz spectrum band for 392.7 billion Indian rupees (US$4.95 billion).

Analysts believe that it gives the operator a significant advantage since the 700MHz band is required to launch standalone 5G.

Figure 1: Reliance Jio is now the sole owner of the 700MHz spectrum in the country.
(Source: Reuters/Alamy Stock Photo)

This band offers improved indoor coverage and significant cost benefits as it covers a larger area, while the midband offers better speed.

Standing alone

"With Jio acquiring 700MHz, we believe that the company is well placed to roll out standalone (SA) 5G," said a note issued by the Bank of America (BofA).

"The advantage of SA 5G is that the company would be able to offer the true low latency applications, such as slicing. This is difficult for its peers to offer given the lack of spectrum (telcos cannot roll this out on 4G bands)."

The biggest problem faced by Jio is that it hasn't been able to attract premium customers who were early adopters and who have largely remained loyal to the incumbent operators, Bharti Airtel or Vodafone Idea. However, some analysts believe that this could change with the service provider's 700MHz advantage.

"While SA 5G still lags in terms of handsets, equipment and application, we find Jio better placed than its peers to offer a differentiated service. This could help the company to poach high-end customers (a chink in its armour) from its competitors – likely increasing competition at the high-end," added the BofA note.

Try, try again

The 700MHz spectrum was also on sale in the 2016 and 2021 spectrum auctions, but it remained unsold because of the high reserve price. This time, it was offered at a 40% reduction.

Media reports suggest Airtel believes it has enough midband spectrum (1800MHz and 2100MHz) and does not plan to bid for any 700MHz spectrum in the future.

Want to know more? Sign up to get our dedicated newsletters direct to your inbox.

In the short term, as 5G services are launched in metros and major cities, and there is no killer use case for consumers, SA 5G might not be required.

However, Airtel will likely need to acquire 700MHz sometime in the future and may end up spending more. Additionally, various telcos in major economies still continue to offer 5G NSA, which uses 4G core.

Related posts:

— Gagandeep Kaur, contributing editor, special to Light Reading