While broadband wireless access (BWA) spectrum was allocated in 2010, most operators have been unable to commercially launch 4G services using this spectrum. The only two operators that have been able to roll out 4G services are Bharti Airtel and Aircel, and that too in select cities. The telecom market is witnessing a data revolution with customers demanding seamless and high speed data access on their mobile devices. This gives a potential opportunity to operators holding BWA spectrum to fast-track their 4G roll-outs and cash in on the data demand, as 4G provides much faster data transfer speeds.

However, owing to the lack of a supporting ecosystem, 4G roll-outs in India have remained limited. For instance, Reliance Jio Infocomm Limited (RJIL), which holds a pan-Indian 4G licence, had initially announced plans to launch services in 2014. However, the operator has now pushed the launch to 2015. Other operators are still playing the waiting game and closely watching the evolving ecosystem and the consumer response.

Recent developments

While India is yet to witness a large-scale 4G launch, there was a gradual increase in the availability of 4G services across the country during 2014. The most significant development in this regard was the service launch by Aircel in the Andhra Pradesh, Assam, Bihar, Odisha, Tamil Nadu and Jammu & Kashmir circles. The operator holds 20 MHz of spectrum in the 2300 MHz band across eight circles in the country. Aircel’s service launch makes it the second operator in the country to provide 4G services after Airtel.

Meanwhile, Airtel expanded its 4G subscriber base by launching services in the Kolkata circle as well as across 10 cities in Punjab. Moreover, to popularise these services, it launched 4G  on mobiles (previously these services were offered through dongles only). To this end, the company partnered with Apple and Xiaomi to provide bundled offers along with their 4G smartphones.

Many operators entered into strategic partnerships with network equipment manufacturers and signed network sharing agreements with their competitors in order to make their networks 4G-ready. RJIL signed several infrastructure sharing agreements with companies such as Bharti Airtel, Viom Networks, ATC India and Indus Towers in 2014 to facilitate the launch of 4G services.

Meanwhile, the liberalisation of spectrum in the 1800 MHz band has allowed operators holding spectrum in this band to utilise it for offering 4G services through the long term evolution-frequency division duplex (LTE-FDD) platform. A number of players have been planning to leverage this opportunity. In January 2015, Bharti Airtel awarded a contract to Finland-based Nokia Networks for the deployment of the former’s 4G network in the 1800 MHz band in the Andhra Pradesh, Northeast, Punjab, Rajasthan, Himachal Pradesh and Karnataka circles. The operator plans to roll out its 4G network in these circles (except Karnataka and Rajasthan) by December 2015, followed by the Karnataka circle by February 2016 and Rajasthan by April 2016. The company had also signed a $200 million agreement with Nokia Networks for building its 4G network in the 1800 MHz band in Mumbai, Madhya Pradesh, West Bengal, Odisha, Punjab and Kerala.

Besides the incumbents in the 4G space, new entrants are also pushing hard for service launch in the liberalised 1800 MHz band. Videocon Telecom is planning to invest Rs 12 billion in rolling out 4G networks in three circles. The company is contemplating launching 4G services in 29 cities in the Uttar Pradesh (East), Uttar Pradesh (West) and Bihar circles by 2017-18. According to the company, these services will be based on the LTE-FDD technology and will be launched in the 1800 MHz band. In the initial phase of roll-out, the company is planning to provide 4G services in six cities, followed by 12 cities in the second phase and 11 cities in the last phase. For the 4G launch, Videocon Telecom is working with Deloitte as its consulting partner and China-based Huawei as its technology partner. The company is also looking to enter into intra-circle arrangements with other telecom operators for 4G services.

Outlook for 2015

Going by the opinion of industry players, the year 2015 will witness significant action on the 4G front. Further, the August 2015 BWA roll-out obligation deadline set by the government is likely to be a key driver for large-scale service launch in 2015. According to the roll-out obligation norms, companies with spectrum in the 2300 MHz band are required to provide services in at least 90 per cent of the service areas by 2015. Failing this, it will lead to the cancellation of licences by the Department of Telecommunications (DoT).

One of the biggest launches is expected by RJIL, which has been granted clearances by DoT to set up international internet gateways for its 4G operations. This will enable the operator to set up gateways at Navi Mumbai and State Industries Promotion Corporation of Tamil Nadu Limited’s IT Park in Chennai. Earlier, DoT had given security clearances to RJIL to start 4G services in six circles – Kolkata, Karnataka, Bihar, Odisha, Andhra Pradesh and Gujarat.

Bharti Airtel is expected to launch its 4G services in the Mumbai circle by March 2015 in order to stay ahead of RJIL. However, Bharti Airtel could run into regulatory hurdles in this circle because it faces the issue of payment of one-time migration fee for the circle. According to DoT, the operator has to pay a fee of Rs 4.36 billion to merge the four internet licences that it acquired from Qualcomm, including Mumbai, with its existing unified licences.

A number of device manufacturers are also gearing up for a large-scale service launch. The Centre for Development of Telematics has developed a 4G LTE router as well as a Wi-Fi solution that can provide connectivity in rural and remote areas. The router, eNodeB, is likely to be launched by March 2015. It is a key component of 4G LTE networks and helps service providers to economically and efficiently improve outdoor and indoor mobile service coverage.

In another development, Videocon Mobile Phones is planning to launch its 4G-enabled mobile phones by April 2015. The company is planning to sell these as a part of bundled offers. It is targeting to sell 6 million handsets per month by 2016.

The way forward

While a number of positive developments have brought optimism in the market, industry experts are of the view that the 4G market in India is still at a nascent stage. In light of this, the Cellular Operators Association of India (COAI) has sought an extension of the deadline for the network roll-out by five years to 2020, citing the lack of requisite devices and network ecosystem. In addition, the COAI is of the view that delays in the development of 4G technology and regulatory procedures have not allowed operators to meet their roll-out obligations. It has further stated that the 4G network requires more telecom towers and that permissions for setting up the required infrastructure are difficult to obtain with various restrictions imposed by municipal bodies. Also, telecom operators have been facing delays in obtaining clearances from DoT for installing new mobile towers.

In spite of these challenges, 4G will play a significant role in the next phase of sector evolution. Ultimately, the speed at which 4G grows will depend on the efforts put in by those who hold 4G licences, the maturity of the ecosystem and the evolution of a clear policy and regulatory regime for the telecom sector.