Strategizing Spectrum Auction: Bharti's Blueprint for Standalone 5G Deployment
The proposed auction blueprint for Bharti paves the way for robust standalone 5G deployment, ensuring its competitive edge in India's telecom landscape without having to wait for the 600 MHz band
Bharti has steadfastly communicated to its stakeholders, including investors, that it does not consider the 700 MHz band critical for its 5G deployment ambitions. Nonetheless, the absence of a low-frequency spectrum has sparked industry speculation regarding Bharti's ability to deploy 5G Standalone (SA) architecture, essential for NR-Voice activation and harnessing advanced 5G features dependent on the User Equipment (UE) Route Selection Policy. Detractors have criticized Bharti's 5G strategy as incomplete, casting doubts on its ability to fully exploit 5G's capabilities. This document aims to clarify how Bharti could smartly navigate the upcoming spectrum auction in India, capitalizing on the 800 and 900 MHz bands to assemble a continuous 10 MHz block suitable for 5G, thus providing a pragmatic and economical alternative to pursuing the same in the 600 MHz band. Such an approach promises to expedite Bharti's transition to 5G SA, circumventing the unpredictability and potential expense tied to the 600 MHz spectrum's future availability. Given the 700 MHz band's unavailability (with the remaining 10 MHz expected to be allocated to railways), Bharti's strategic decisions are critical for its 5G trajectory.
800 MHz Band Map
To demonstrate how Bharti can strategically use the 800 MHz and 900 MHz bands to form a contiguous 10 MHz block for 5G SA deployment across most service areas, it's essential to present a clear band map. This map will serve as a foundational reference, illustrating Bharti's current spectrum holdings and potential pathways to consolidate these frequencies into a single block. Let’s Begin with the 800 MHz band map.
One can see that Bharti already has 5 MHz each (marked green) in four circles (HA, MA, MP, UPW), and a lot of spectrum up for in the auction block to bid (marked pink). By combining with the 900 MHz spectrum band we will attempt to draw out an integrated bidding strategy for Bharti in the next round of spectrum auction.
900 MHz Band Map
Below is the 900 MHz spectrum band where the existing holding of Bharti is marked out along with the quantum available for bidding.
Here too the same colour code has been used to describe Bharti’s spectrum (Green) and those available for bidding (pink).
Bharti’s Combined Bidding Strategy - 800 & 900 MHz Bands
Outlined below is Bharti's strategic approach to bidding in the 800 and 900 MHz bands.
The strategy enables Bharti to secure a 10 MHz block suitable for 5G SA deployments in nearly all regions, with only five exceptions. In four of these regions, Bharti can still harness 5 MHz for 5G SA, with Gujarat being the sole exception where it currently lacks spectrum. Over time, as Bharti transitions its 4G voice services to NR-Voice, the necessity for extensive 4G spectrum holdings diminishes, making the 5 MHz allocation sufficient. Moreover, maintaining a minimum of 5 MHz of 4G spectrum in all regions but Maharashtra and Madhya Pradesh will facilitate a seamless transition for Bharti's customer base to 5G, utilizing these frequencies as transitional 'parking slots.' Also, note that by executing this plan Bharti will end up spending just Rs 26,159 K Cr much less than Rs 39,070 Cr if they opted to buy 10 MHz of 600/700 MHz band.
Bharti's Enhancement Plan for Suboptimal Circles
From the above analysis, we can see that Bharti’s position would be weaker in 5 of the 22 circles (DL, GU, HA, KE, & MU) where it will have less than adequate spectrum for rolling out effective standalone 5G SA. Now to improve its situation in these circles, Bharti can deploy two options - a) Wait for the 600 MHz band; b) Acquire additional spectrum in 1800/2100 MHz bands. Analysing the band map of these bands will provide us with cues in case option (b) is executable.
1800 MHz Band Map
Below is the band map for the 1800 MHz band.
2100 MHz Band Map
Below is the band map for the 2100 MHz band.
In the band maps for both the 1800 and 2100 MHz frequencies, the circles where Bharti's spectrum position is less robust are highlighted with red stars.
In Delhi, Bharti has the opportunity to acquire an extra 8 MHz in the 1800 MHz band, raising its total to 15 MHz, at an additional cost of Rs 2160 crore. Alternatively, it could augment its holdings by 5 MHz in the 2100 MHz band for Rs 1255 crore, increasing its total spectrum to 20 MHz.
In Gujarat, while the 1800 MHz band has limited availability with only 4 MHz on offer, Bharti could enhance its capacity to 20 MHz by securing an additional 5 MHz in the 2100 MHz band for Rs 700 crore.
For Haryana, an additional 10 MHz in the 1800 MHz band is accessible for Bharti at Rs 410 crore - taking its kitty from 10 MHz to 20 MHz. However, no additional spectrum is available for bidding in the 2100 MHz band in this circle.
In Kerala, Bharti could acquire another 10 MHz (up from the existing 10 MHz) in the 1800 MHz band for Rs 580 crore, but like Haryana, it faces a constraint in the 2100 MHz band with no additional spectrum up for grabs.
Mumbai presents an opportunity for Bharti to obtain an extra 10 MHz in both the 1800 and 2100 MHz bands, at costs of Rs 2640 crore and Rs 1960 crore, respectively. In case it chooses to execute the former it can drive its capacity from 15 MHz to 25 MHz.
Implementing these acquisitions would result in an additional expenditure of Rs 6500 crore for Bharti, culminating in a total investment of Rs 32,500 crore.
Conclusion
In conclusion, Bharti's strategic foresight in navigating the spectrum auction landscape underscores its commitment to harnessing 5G's transformative potential, despite the challenges posed by the unavailability of the 700 MHz band. By astutely leveraging the 800 and 900 MHz bands, Bharti has outlined a coherent path to amass a vital 10 MHz block essential for widespread 5G SA deployment, demonstrating adaptability and strategic acumen.
This comprehensive strategy not only prepares Bharti for immediate 5G SA (Standalone) implementation but also positions it advantageously for future technological evolutions and market demands. The proposed acquisition plans for underperforming circles reflect a pragmatic approach to overcoming spectrum limitations, ensuring competitive service offerings across all regions.
While the financial implications are significant, the outlined expenditure is a strategic investment into Bharti's long-term infrastructure, poised to enhance network performance, competitiveness, customer experience, and service innovation. This forward-looking strategy, emphasizing both immediate needs and future growth, highlights Bharti's role as a key player in India's 5G evolution, setting a benchmark for operational excellence and strategic foresight in the telecommunications industry.
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