Bharti Airtel will shut down its entire 3G network across India’s 22 telecom circles by March, marking the beginning of the end of the technology, while focusing on providing 4G services to subscribers, a top company official said. It will, however, continue to provide 2G services for feature phone users.
The process began last month when the telecom giant shut down 3G network in the Kolkata circle. “This has worked very well in Kolkata. Now we will do this process across India. By September, we will shut down 6-7 circles and by March the entire 3G network pan India will shut down,” Bharti Airtel CEO Gopal Vittal said in a post-earnings call with analysts on Friday.
Airtel’s decision marks the beginning of the phase out of 3G services in India, which is now increasingly moving to 4G, triggered by the entry of Reliance Jio in September 2016 which provides only 4G services. Rival Vodafone Idea continues to provide 2G, 3G, and 4G services.
In Kolkata, Airtel has re-farmed the 900 MHz band spectrum being used for 3G to strengthen its 4G network. The telecom operator is deploying L900 technology in the 900 MHz band to complement its 4G services in the 2300 MHz and 1800 MHz bands.
This, Airtel expects, will improve 4G availability inside buildings and coverage across homes in Kolkata.
However, the company does not expect much in cost savings by shutting down 3G services as it would continue to use the same equipment to offer 4G services to users.
“Our capex will continue for deployment of new sites and some loading on 2300 MHz band,” Vittal said.
On Thursday, Airtel Ltd posted its first quarterly loss in 14 years amid a brutal price war unleashed by Reliance Jio. Airtel swung to an Rs. 2,866 crore loss in the quarter ended 30 June from a net profit of Rs. 97 crore in the year earlier as finance cost rose and it incurred a one-time loss of Rs. 1,445 crore.
However, consolidated revenue from operations grew 4.7% to Rs. 20,738 crore in the June quarter from Rs. 19,799 crore a year ago. Revenue from the India wireless business grew 4.1% year-on-year to Rs. 10,724 crore.
Airtel’s consolidated net debt was Rs. 1.16 trillion as of June-end.
The silver lining for the firm was its average monthly revenue per user (Arpu) from India mobile services that rose to Rs. 129 in the June quarter from Rs. 123 in the preceding three months. This is also due to the fact that its subscriber base has shrunk.
Airtel’s Arpu is the highest across telecom companies in the June quarter, with Jio at Rs. 122 and Vodafone Idea at Rs. 108.
The launch of low-cost tariff plans by Reliance Jio, a unit of Reliance Industries Ltd, forced rivals to drop their rates, hurting profit margins. Smaller companies were forced to either shut shop or get acquired, leaving just Airtel, Jio, and the merged entity of Vodafone and Idea to compete in the Indian market.
The performance of the firm’s Africa unit has proved to be a beacon of hope. Airtel Africa posted revenue of $795.9 million, a 6.9% rise from $744.5 million a year earlier, largely driven by growth in Nigeria and East Africa.
Africa operations posted a profit of $132.2 million in the June quarter.―Livemint