Demystifying 5G Capex For Indian Telecom: ICICI Securities

ICICI Securities Report

We have attempted to demystify 5G capex for Indian telecom – Bharti Airtel Ltd. and Reliance Jio. We have assumed 5G rollout to be faster than 4G. However, capex spent will be lower than 4G as it was deployed on multiple spectrum bands - 900 mega hertz, 1800MHz, 2100MHz and 2300MHz versus only 3500MHz for Bharti Airtel’s 5G, while 800MHz, 1800MHz and 2300MHz versus 700MHz and 3500MHz for RJio’s 5G.

Bharti Airtel has spent Rs 1,115 billion on 4G over FY17-22 and RJio has invested Rs 1,668 billion (green field operation and also included cost capitalisation).

We expect Bharti Airtel to spend Rs 454 billion on 5G and allied capex over FY23-25E (Rs 666 billion over FY23-27E) to reach 5G coverage of 70% by FY25E and 85% by FY27E.

RJio to incur Rs 655 billion on 5G and allied capex over FY23-25E (Rs 940 billion over FY23-27E) to reach 5G coverage of 75% by FY25E and 95% by FY27E. Our RJio capex estimate has an upside risk.

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