Bharti Airtel, which has been expressing concern over the higher cost of 5G wireless broadband or fixed wireless access (FWA) equipment, is expected to benefit with Jio ramping up to launch Jio AirFiber, its FWA device for home broadband, according to analysts.
The reason cited by analysts for Airtel benefiting from Jio’s fast approach towards FWA is the possible economies of scale, which will reduce the price of FWA equipment.
“Though Bharti states that higher CPE cost of FWA vs FTTH (fibre-to-the-home) is a dampener, we believe that Jio’s focus on ramping up FWA during FY24 may result in a sharp fall in FWA CPE (consumer premises equipment) due to economies of scale. Bharti would also consequently benefit from this,” IIFL Securities said.
While Airtel has been doing several experiments on FWA, Airtel CEO Gopal Vittal said the home broadband business will be driven by FTTH and FWA is still not attractive on both economics and reliability. In the January-March quarter post-earnings analyst call, Vittal reiterated that cost of FWA router at about $180, is higher than the $100-120 cost per connected home using fibre.
According to analysts, wireless networks such as FWA are much cheaper to operate and maintain than wired networks (FTTH), which are prone to breakage due to digging and construction activities.
Bharti Airtel currently has over six million home broadband users, compared to Jio which has around nine million home broadband users.
“Jio is taking the next step in homes (Fibre+FWA+payTV) through the launch of disruptive “backup” fibre plans, LCO (local cable operators) partnerships, FWA launch. Backup plans are intended to help trojan entries into peer customers. LCO partnerships and FWA launches can expand coverage and reach,” JP Morgan said.