The loss of millions of 2G customers during the lockdown could turn out to be a blessing in disguise for telcos, enabling them to speed up their 4G coverage by re-farming unused spectrum to better technology.
According to experts, while telecom firms were already on the path to upgrading their networks to 4G by re-farming the existing 2G/3G spectrum, the lockdown has paved the way for faster realization of these plans to reduce fixed costs and improve services.
Unlike Reliance Jio Infocomm Ltd, peers Vodafone Idea Ltd and Bharti Airtel Ltd have maintained that they do not subscribe to the idea of “2G Mukt Bharat” yet. But they have been reducing dependency on the 2G network amid heightened competition from Jio, which only offers 4G services and claims to be ready with 5G technology.
The fall in the 2G customer base leading to unused spectrum is a nudge factor for telcos to convert the airwaves into 4G,” said T.V. Ramachandran, president, Broadband India Forum. He added that re-farming to 4G will require policy as well as technological changes, along with additional investment. The incremental cost of upgradation, however, will differ from case to case, depending on the spectrum band concerned.
Airtel re-farmed 900 megahertz (MHz) spectrum, previously used for 2G services across major markets, to 4G last year, and converted most of its 3G networks to 4G. According to reports, Airtel also plans to add around 25,000 rural 4G sites by 2022 to ramp up its connectivity in such areas. Vodafone Idea too has re-farmed radio airwaves in the 900 MHz, 1800 MHz and 2100 MHz bands for 4G services in major markets.
Sector experts believe that the telcos now have a chance to focus on bridging the 4G gap across rural markets to meet the rising demand for data from the millions who migrated from urban to rural areas due to the lockdown. However, telcos cannot do away with the 2G network entirely as they still have many customers on it who use feature phones, said Rajiv Sharma, head of equity research, SBICAP Securities. 4G services are meant for smartphone users.
Currently, 51% of Airtel’s customer base is on 2G network, while for Voda Idea it is 63%. According to industry body GSMA, 12-13% of users will continue to use 2G handsets till 2025 in India. Live Mint