After several years of tepid 4G growth, the latter half of 2015 turned out to be a busy phase. By the close of the calendar year, 4G services of all major operators had gone live in select circles and pockets in India.
Spectrum liberalisation has allowed operators to offer 4G services by utilising airwaves in the 1800 MHz band. As a result, operators like Idea Cellular, Vodafone India, Reliance Communications (RCOM) and Videocon Telecom ended up buying substantial spectrum in the band during the March 2015 auction to enter the 4G space. Spectrum in the 1800 MHz band also attracted keen interest from players like Bharti Airtel and Reliance Jio Infocomm Limited (RJIL) that had been unable to garner 4G success despite holding broadband wireless access (BWA) spectrum from 2010. The auction allowed these players to pick up airwaves in the more efficient 1800 MHz band and strengthen their spectrum foothold.
The months following the auction have been abuzz with news feeds from all major operators. Bharti Airtel went on a service launch spree, extending its reach in most of its licensed circles, while new 4G operators also made their launch strategies public. Before the close of 2015, Airtel’s 4G services had reached nearly 400 cities, and even Idea Cellular and Vodafone India had joined the 4G club. RJIL has launched its 4G services as well, though on a very small scale. Its much-awaited commercial launch still continues to elude the industry.
tele.net takes stock of the developments and operator activity in the 4G space during 2015, apart from elaborating on future plans and growth drivers…
Service launch and reach
Bharti Airtel: Bharti Airtel made its first move in the 4G space as early as March 2012 with a launch in Kolkata. Initially, services were being extended to other cities at a sluggish pace, but the company entered the 4G battlefield in full force by mid-2015. Its 4G services are currently available across more than 350 cities.
Idea Cellular: Towards the end of 2015, Idea Cellular went on a 4G spree, launching services across all the southern states where it holds spectrum: Andhra Pradesh, Karnataka, Kerala, Tamil Nadu and Telangana. This momentum has continued in 2016 as well, with the operator making 4G inroads into the central and north Indian circles as well. It is in the process of rolling out 4G in the Punjab, Madhya Pradesh and Chhattisgarh, and Haryana circles.
Idea’s 4G long term evolution (LTE) services are expected to be available across 183 towns in its seven telecom service areas by January 31, 2016. It will launch 4G in Maharashtra and Goa, the Northeast and Odisha by March 2016, taking its coverage to a total of 750 cities and towns across 10 circles by mid-2016. To this end, it is planning to roll out 30,000-35,000 3G and 4G cell sites and invest nearly Rs 10 billion in 4G service launches.
In November 2015, Idea purchased Videocon Telecom’s spectrum in two circles, Gujarat and Uttar Pradesh (West), for launching 4G services.
Vodafone India: The operator made its 4G entry in December 2015 by launching services on the 1800 MHz band in Kerala, and followed it up with Karnataka. It currently offers 4G in select cities in both circles. The operator is also planning to launch it in Mumbai, Kolkata and Bengaluru before the end of the 2015-16 fiscal year, and in Haryana and Uttar Pradesh (East) by April 2016.
Since March 2015, Vodafone has invested over Rs 3.5 billion and Rs 5 billion in upgrading its network in the Kerala and Mumbai circles respectively. Sizeable investments have also been made in other circles and in high capacity fibre roll-outs to enhance internet connectivity. Vodafone stands to gain from the global 4G experience of its parent group. The UK-based telecom giant has already launched 4G in 18 countries and currently has over 20 million 4G customers.
BSNL: Recently, Bharat Sanchar Nigam Limited (BSNL) marked its entry into the 4G space by rolling out services in Chandigarh on a non-commercial basis. The services are available for a limited number of BSNL employees, and customers can visit the 4G centre to avail the same. With this move, BSNL became the first operator to have launched 4G on the 2500 MHz band. It has spectrum in the 2500 MHz band in 15 circles.
BSNL is keen on taking the Wi-Fi route to enhance 4G adoption. It intends to integrate its Wi-Fi hotspots with the mobile network so that they virtually act as 4G hotspots. The operator has already established 620 of these hotspots and will be setting up 2,500 by the end of March 2016. It intends to take the total number of hotspots to 40,000 by March 2017.
RJIL: RJIL failed to commercially launch 4G in the past year. However, it did manage to offer these services to group employees on a small scale. Given the significant groundwork in terms of deploying robust physical network infrastructure and developing applications and content, the industry is now looking forward to its commercial 4G launch. The recent RJIL-Reliance Communications (RCOM) partnership for sharing and trading 4G spectrum is likely to affect the incumbents’ business adversely. RJIL stands to gain from RCOM’s existing user base, and will be able to access the majority of it through the arrangement. It will also be able to offer its subscribers voice services using circuit-switched fallback technology in addition to voice over LTE (VoLTE) and voice over Wi-Fi.
RJIL is expected to commercially roll out its telecom services in March-April 2016, having already invested about Rs 1,000 billion in readying its telecom network. Its board has further approved a proposal to infuse fresh equity of Rs 150 billion by issuing 15 billion shares to the existing shareholders.
Others: Aircel is currently offering 4G services to enterprise clients through leased lines and Wi-Fi devices. Meanwhile, Tikona Digital Networks has announced its plans to roll out 4G services across 30 cities in its five telecom circles in the first half of 2016.
During 2015, many operators entered into strategic partnerships with network equipment manufacturers. Bharti Airtel has awarded a contract to Nokia Networks for 4G deployment in the 1800 MHz band in the Andhra Pradesh, Northeast, Punjab, Rajasthan, Himachal Pradesh and Karnataka circles. It has also signed a $200 million agreement with Nokia for building its 4G network in the 1800 MHz band in Mumbai, Madhya Pradesh, West Bengal, Odisha, Punjab and Kerala.
Apart from partnering with vendors for technology support, operators also struck deals with competitors to enhance their 4G foothold and service potential. RJIL pioneered this trend by signing several infrastructure sharing agreements with companies like Bharti Airtel, Viom Networks, ATC India and Indus Towers. RJIL and RCOM’s spectrum trading and sharing agreement will allow RCOM to trade its spectrum in nine service areas where RJIL does not have spectrum in the 800 MHz band. The two operators will also share spectrum in 17 circles.
In August 2015, Bharti Airtel acquired 100 per cent stake in Augere Wireless Broadband India, which holds 20 MHz of BWA spectrum in the Madhya Pradesh and Chhattisgarh circle. In November 2015, Idea Cellular purchased Videocon Telecom’s spectrum in two circles in India’s first ever spectrum trading deal. Idea intends to use Videocon’s spectrum for launching 4G in 2016. RCOM has signed an agreement to merge with the Indian subsidiary of Russian company Sistema, Sistema Shyam TeleServices Limited (SSTL). The merger with SSTL will allow RCOM to use the former’s 800 MHz-850 MHz spectrum to provide better 4G services for competing with companies like Airtel and RJIL. SSTL holds liberalised spectrum in this band in eight circles: Delhi, Kolkata, Gujarat, Karnataka, Tamil Nadu, Uttar Pradesh (West), Kerala and West Bengal.
Vodafone India is also reported to be in early talks with Tikona Digital Networks to buy the latter’s 4G spectrum for expanding its high speed broadband footprint.
Pricing, marketing and content
In a bid to attract more users, operators have adopted several strategies, such as easing price points to bring 4G at par with 3G, making 4G SIMs available before service launches for a smooth transition, and offering relevant digital content.
Bharti Airtel has slashed 4G tariffs to bring them down to 3G levels. Add-ons like unlimited mobile voice calls, bundled movies and music packs, and a mobile application that gives users access to a vast collection of videos are also being offered. The operator has tied up with retailers to allow the home delivery of 4G SIMs on buying specific brands of handsets, which have starting prices as low as Rs 4,000. It is even offering home delivery of 4G SIMs for existing customers.
Similarly, Vodafone India has adopted the strategy of selling 4G SIMs in a circle before the service goes live in that circle. For instance, its 4G SIMs are already available in Delhi in the run-up to the commercial launch of its high speed wireless data services in the national capital. Customers who are upgrading to 4G-ready SIMs will be given 1 GB 4G internet free at the time of the launch. Prior to that, Vodafone had started selling 4G SIMs in Mumbai.
On the content side, RJIL has all strategies in place to position itself as a digital content company. Its network is ready for offering end-to-end solutions across the entire value chain of digital services, including education, health care, security, communication, financial services, government-citizen interfaces and entertainment. The operator has already launched applications like Jio Chat and Jio Money exclusively for its network in various categories.
Deployment of VoLTE
VoLTE technology is extremely important for telecom operators to offer a holistic 4G experience. They must also invest in the technology to counter potential threats from over-the-top applications. In 2015, RJIL had given Nokia a contract worth Rs 6.7 billion for pan-Indian VoLTE deployment. Following suit, Airtel and Vodafone India have reportedly signed deals with Nokia to deploy VoLTE on their networks. Idea is reported to be in active talks with the vendor as well. However, unlike RJIL, the incumbents are likely to use VoLTE as a complementary service to their existing voice offerings. On the other hand, VoLTE will be the base engine for delivering RJIL’s voice service since it has limited 2G and no 3G fallback network.
Outlook for 2016
The year ahead is expected to be a milestone year for 4G in India as mass uptake of services is expected across the majority of cities and towns. However, much will depend on the evolution of the 4G ecosystem, which continues to be marked with the relatively low proliferation of smartphones and limited localised content development and availability. Considering that the competition is heating up with every passing day, it will be interesting to see how the Indian 4G story unfolds, especially as the industry awaits RJIL’s 4G launch.
Akanksha Mahajan Marwah