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Telecom Operators: How worst may be over for Reliance Jio and Airtel

The days of profitability may finally arrive Airtel And Reliance Jio. According to analysts, the top two telecom operator, Reliance Jio And Bharti Airtel is likely to improve profitability and cash generation by FY2025. According to him, this is likely due to 5G capex and a possible reduction in customer churn from this quarter, FY2014.
In a note to analysts, BNP Paribas said, “Capex will remain elevated in 2QFY24, but we expect moderation in 2HFY24, which will help improve profitability and cash generation… medium term with growth levers like Airtel and Jio customers I am in good condition.” Upgrades, market share gains and tariff hikes are just a matter of time.
According to a report in Economic Times (ET), Reliance Jio and Airtel managements are guiding for a reduction in network capex from FY2025. This is likely to be possible with accelerated 5G rollout across India by December 2023 and March 2024 respectively.
“Bharti’s management capex guidance implies (annual) India business capex could fall to Rs 20,000 crore from FY2015 (from Rs 28,000 crore in FY2013 and similar guidance in FY2014), although we continue to expect fiscal We continue to build at a conservative Rs 27,000 crore for 2015,” JM Financial said, according to the report.
5G monetization is still far away
Analysts still do not see companies taking monetization of 5G services seriously. Reliance Jio and Airtel recently took the first step by launching AirFiber or 5G-based fixed wireless access (FWA) services in some markets. This could eventually lead to some 5G monetization for these brands.
One year of 5G rollout in India
Both Reliance Jio and Airtel have been expanding their networks since their launch in October 2022. Reliance Jio is said to have over 62 million 5G users, while for Airtel the number is over 50 million customers. Vodafone Idea (Vi) has not yet started the rollout of its 5G services.
Last month, Jio launched its Jio AirFiber services in eight cities – Ahmedabad, Bengaluru, Chennai, Delhi, Hyderabad, Kolkata, Mumbai and Pune. Rival Bharti Airtel was the first to launch 5G-FWA services in Delhi and Mumbai.
Jio began the commercial rollout of its 5G services in four cities from Diwali. Jio is using a standalone (SA) architecture, while Airtel is using a non-standalone (NSA) architecture for its 5G network.
According to Reliance Industries (RIL)’s Q1FY24 presentation, Jio has deployed over 115,000 5G sites and around 690,000 5G cells across India. It added that “the rollout is well ahead of plan”, and noted that Jio’s 5G network now covers more than 90% of census cities.

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