5G is going to be the next revolution in the connectivity standards, and it is going to come with its share of challenges. One of the biggest issues that Vodafone Idea (Vi) and other telcos will have to navigate through will be delivering the network seamlessly to the end-user. Since 5G networks would operate on a higher spectrum band, they will require even denser infrastructure and backhaul to support the connectivity. This will involve a lot of costs for the telcos since they will essentially have to spend on both spectrum and the ground-level infrastructure. But there’s something that the telcos can do, and it is something that will benefit Vodafone Idea a lot.
Vodafone Idea Can Collaborate With Jio and Airtel to Save Money
Vodafone Idea can collaborate and work with the top two operators, Reliance Jio and Bharti Airtel, to save their money. Both Jio and Airtel have enough money to sustain and keep investing in their networks. Yes, with the relief package in place, even Vodafone Idea can do it, but that is only possible to a certain extent.
If Vi can make Jio and Airtel share the infra cost with it, it will benefit everyone. This will also push the telecom connectivity standards a little higher. Vi has a lot of debt, and even with the relief package, it can’t invest a lot in its networks very aggressively.
Sunil Bharti Mittal recently said that he met Nick Read, CEO of Vodafone Group Plc, and talked with him about covering the lost ground. Mittal had further said that he would also talk to Mukesh Ambani, Chairman and Managing Director (MD) of Reliance Industries Limited (RIL), to approach the market with a coordinated strategy.
If this thing happens, it will be a really good thing for the sector in the long run. Sharing infrastructure costs with each other will only result in a win-win situation for everyone. At the end of the day, Vodafone Idea is going to stay. Instead of beating down each other for a bigger market share, the telcos can go with a coordinated approach as Mittal has suggested and come with better results not only for themselves but for the entire industry.
Neil Shah, Vice President, Counterpoint Research said that if there is no fibre in backhaul, 5G will not be successful even with large amounts of the spectrum at disposal. Shah said that if Jio lends its fibre to Vodafone Idea, it will be a win-win situation for both companies.