5G handsets, tech limitations keep tariff hikes at bay for Jio, Airtel

The initial 5G rollout in the metro cities may not see any tariff hikes from Reliance Jio and Bharti Airtel, according to a Financial Express report.

Telecom operators Reliance Jio and Bharti Airtel are not looking at higher tariffs for 5G services during the initial level of launch in metro cities.

The telecom giants sighted low penetration of 5G-enabled handsets and technical limitations arising due to the inability of a bulk of these handsets in supporting certain spectrum bands as key reasons for this move.

According to the report, the telecom operators are unlikely to introduce any new 5G packs, instead they plan to upgrade certain 4G tariff plan users to 5G. This way it would be easier to launch 5G amid technical challenges as the users will not be required change SIM cards.

Also, since the service providers will know which subscribers have 5G-enabled phones, they will directly reach out to them regarding their upgrade at no extra cost.

The reasoning behind staying put on the pricing side is being sighted as the likely increase in data usage among 5G users, which will translate into higher average revenue per user.

At present, only around 50 million of the total 600 million active smartphones are 5G-enabled.

According to Counterpoint Research, 5G-enabled handsets would contribute around 35 per cent to the overall sales of smartphones in the October-December quarter. This will increase the total number of installed 5G phones to around 85 million.

The road ahead for 5G roll out may not be a smooth one with several technical constraints. For instance, the milli-metre band, which has been auctioned in India, is not used in China for 5G services, so most smartphones may not be compatible with the 5G signals as they may be be tuned to the spectrum bands used in China. 

Reportedly, it is quite likely that sub-Rs 20,000 5G handsets in the market may not be compatible with the spectrum bands auctioned in India. According to Counterpoint’s estimate, only 25 per cent of 5G handsets in the market are in the sub-Rs 20,000 category. Therefore, the operators would have to depend on the newer shipments designed for Indian market.

The launch of 5G services by Jio and Bharti would be roughly around Diwali.

Earlier, Reliance chairman Mukesh Ambanmi had announced that Jio will launch its service in key metros including Mumbai, Delhi, Chennai and Kolkata by Diwali and a pan-India coverage by 2023 end.

Bharti Airtel CEO and MD Gopal Vittal had said that Airtel’s 5G service will deliver speeds which could be between 20 and 30 times higher than the one that is available. The service will facilitate network slicing for special requirements. “If you are a gamer and want a flawless experience, we will be able to slice the network for you. Or if you are working from home and want a consistent experience, we will deliver it for you,” Mittal wrote in a communication to shareholders.

Mittal’s statement came days after Ambani’s comments that only Jio will offer true 5G service. “This non-standalone 5G approach is a hasty way to nominally claim a 5G launch but won’t deliver the breakthrough improvements …” Ambani had said in an indirect reference to Airtel and Vodafone Idea.

However, Vodafone Idea is yet unveil its 5G launch plans.