If 5G is on time, ad spends of telcos may zoom in FY23

India’s top three telecom service providers , Reliance Jio, and are expected to spend a combined Rs 700 crore or more this fiscal year, a more than two-fold increase from a year ago to market the rollout of their respective 5G services.

This is subject to the auctions taking place as proposed in June-July, and the telcos rolling out their services by the end of the calendar, experts said.

Media planners estimate that FY20 and FY21 saw the sector spend Rs 500 crore a year each on marketing and advertising. In FY22 however, spending was slashed by nearly 40% to Rs 270 crore, with Bharti Airtel cutting back drastically. In FY23, though, media planners and strategists expect the rollout of 5G to trigger spending once more, nearly trebling year-on-year advertising expenditure by telcos.

“The rollout of 5G will result in a spurt in spending. Players will be cautious with media spends, but definitely, the category is expected to see a surge in ad spends once the 5G services rollout,” said Sam Balsara, chairman, of Madison World.

If 5G is on Time, Ad Spends of Telcos may Zoom in FY23

Rammohan , country head, Integrated Media of DDB Mudra Group, said once the telcos buy the 5G spectrum, they will need to advertise heavily to inform people about their services. “This will result in a massive surge (in spending). Since the (telecom) service providers will look for reach and continuity, they will once again look at cricket, especially the IPL.”

This could mean the return of major advertisers and sponsors on cricketing properties like the IPL, and maybe even some ICC tourneys, said experts. In the past, telecom service providers have been known to spend heavily on sports sponsorships and advertising.

Jio, Airtel and Vodafone Idea did not respond to ET’s emailed queries.

“Telcos will have to harness the power of 5G to demonstrate the new experience to their subscribers,” said Chandrashekar Mantha, partner, Deloitte India. “I believe partnerships (on content, bundling, gaming and immersive experiences) will not only help them exhibit their capabilities to explore the true potential of 5G but also enable them to differentiate themselves when they plan their marketing initiatives.”


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