The merits and demerits of the telcos' 5G strategy however is clearly dependent on the financial muscle of players, reports Surajeet Das Gupta.
In its analyst call after the financial results a few days ago, Bharti Airtel CEO Gopal Vittal spent a substantial amount of time clearing the air on what he said were "misconceptions" about 700 MHz, for which Bharti did not bid, and on its decision to opt for a non-standalone (NSA) 5G network.
The argument for going for an NSA network was simple: The country lacks a mobile device ecosystem for standalone (SA) 5G networks.
And the 700 MHz band, Vittal pointed out, only offers coverage especially indoors but does not offer more speed (it's similar to 4G).
So its characteristics are similar to the 850 and the 900 MHz bands in which Airtel has enough spectrum already.
Vittal also said the company had adopted a conscious strategy for years of buying spectrum in the mid bands -- 1800 and 2100 MHz -- to ensure that Airtel can offer high upload speeds that its rivals cannot match.
If the telco did not have so much spectrum in these mid-bands it would have had no choice but to buy 700 MHz.
So contrary to what many believe, Vittal drove home the point that Airtel's 5G services will be of high quality and 700 MHz provides no magic.
Vittal's spirited response is understandable.
Bharti Airtel's main rival, Reliance Jio, surprised the market, including competing telcos, by acquiring 10 MHz in the 700 MHz band at a stiff price tag of Rs 40,000 crore.
This could be a sign of another market disruption just as Jio did in 4G, according to analysts.
Globally, 700 MHz is considered a "pioneer band" -- together with 3.5 GHz and 26 GHz -- for 5G services.
It offers coverage of 8-10 km against only 1-3 km in the 3.5 GHz 5G band.
In its annual report, even Bharti says that its test run near Kolkata with Nokia with 700 MHz on an SA network was able to hit broadband coverage of 40 km.
Apart from Europe even Chinese telcos are moving to 700 MHz quickly and most experts said the ecosystem is already pretty vibrant.
Jio's plan seems to be to skip NSA networks, which were launched in 2019, and go directly for a more non-complex SA network because the ultra-low latency enables it to offer new use cases that are expected to comprise the bulk of the telco's revenue -- network slicing, enabling high quality private networks, robotics, high precision machine-to-machine functions, autonomous vehicles or robotic remote surgery.
For the uninitiated, SA networks have both their core, which controls the network, and radios on a 5G platform.
In the case of NSA, telcos can share the 4G core, which reduces initial investments.
With no killer use cases based on low latency anywhere on the horizon many would argue it is prudent as an interim measure before upgrading to SA.
After all, current subscribers will be looking mostly for high speed functionality with better coverage.
Besides, the NSA advocates argue, one can always buy 700 MHz, in which 15 MHz, is lying unsold in the next auctions when subscriber numbers increase and more coverage is required.
Or, as consumers shift to 5G, re-farm much of the spectrum used for 4G to 5G to expand coverage for a long while.
The debate on the merits and demerits of telcos' 5G strategy however is clearly dependent on the financial muscle of players.
As Vittal said after the auction: "The strategy in the auction was to buy the best spectrum assets at a substantially lower relative cost to competition."
Jio clearly decided to pay a high bill for 700 MHz because it would have not been possible to power an SA network.
That is because it does not have enough spectrum in the 1 GHz band, and the bulk of the 850 MHz band is used for 4G.
With a cash surplus and reserves of Rs 462,000 crore on the books of Reliance Industries, of which Jio is a subsidiary, in FY22, the telco has more money to take an aggressive stance compared to Bharti Airtel (reserves and surplus of Rs 63,700 crore), which wants to utilise its 4G spectrum more.
But telecom vendors say that many telcos globally are upgrading from NSA systems and a few directly going for SA networks. So the ecosystem is already vibrant.
According to Global Mobile Suppliers Association (GSA), 99 operators in 50 countries are investing in SA public 5G networks (trial, planned or deployed) which accounts for 21 per cent of all 5G networks.
As many as 20 operators in 16 countries have launched commercial SA services. But Vittal countered that in the US, and South Korea SA services account for only 10 per cent of subscribers.
From the devices side, Airtel has raised a concern on the lack of an ecosystem for SA 5G phones, whereas all devices work on NSA.
But GSA says there are 663 devices powered by SA which are present or have been announced in the market, accounting again for more than 55 per cent of all 5G phones globally.
True, in India the over 150 5G phones are still all on the default NSA mode. But the shift to SA, said chip design maker Qualcomm, one of the largest players in the 5G mobile device space in India, is already happening quickly.
"Key features such as standalone mode and carrier aggregation that are relevant to the Indian market are supported on a majority of our Snapdragon 5G platforms.
"OEMs can enable these features on all 5G phones to be launched in the market and we expect that the upcoming phones will come with SA support," said Rajen Vagadia, president of Qualcomm India & Saarc.
Vagadia also argued that for the older 5G phones that are already in the market (60-80 million of them) talks are on with phone makers to add remote software updates to make them SA-ready.
Telecom vendors said Jio's success will depend on how quickly it can get some of the big use cases requiring SA networks off the ground commercially, especially in the enterprise space, at attractive prices.
Whatever the choices, the next telecom battle is about to begin.
Feature Presentation: Ashish Narsale/Rediff.com