In the past few months, significant enthusiasm and activity has been witnessed in the Indian 4G space. With almost every operator keen on joining the 4G race, new strategies and roll-out plans are being chalked out and announced almost every day. Bharti Airtel, the pioneer in the 4G space in India, has already launched these services in 300 cities, while Reliance Jio Infocomm Limited’s (RJIL) much anticipated service launch is due in December 2015. Reliance Communications (RCOM) and Vodafone India are also looking at a year-end launch, while Idea Cellular has decided to roll out its 4G services in the next calendar year.

The growing optimism regarding 4G services can be attributed to an evolving service ecosystem. Spectrum liberalisation has allowed operators to launch 4G services across multiple bands. Earlier, these services could only be launched using spectrum in the 2300 MHz band; how-ever, several operators are now planning to launch them on the more efficient 1800 MHz spectrum band. The move has allowed players such as Vodafone India, Idea Cellular and Videocon Telecom to venture into the 4G space, while lending strength to the existing 4G spectrum portfolio of broadband wireless access (BWA) players like Bharti Airtel and RJIL.

Given the service roll-out plans, the handset space is now abuzz with the launch of affordable 4G/long term evolution (LTE) devices. As per industry estimates, the total LTE device shipments to the country have been doubling for the past two quarters. As for the device mix, smartphones account for the lion’s share (almost 97 per cent) in terms of units, the remaining being accounted for by data cards. 4G smartphones are being priced very close to their 3G counterparts in entry-level categories in order to encourage adoption.  Similarly, the application/ value-added service space has undergone a significant change with the mass uptake of 3G services. Users are now keen on browsing these applications on higher speeds than that of 3G.

A look at the key operator initiatives and announcements in the 4G space…

Bharti Airtel

Bharti Airtel made its first move in the 4G space in as early as March 2012, when it launched these services in Kolkata. Till recently, the services were being extended to other cities at a sluggish pace. It was only in mid-2015 that the company entered the 4G battlefield in full force, after its competitors announced their 4G roll-out plans.

Bharti Airtel’s 4G services are currently available across more than 300 cities in India, with a new city being added to the list almost on an weekly basis. The com-pany has also signed a definitive agreement to acquire 100 per cent stake in Augere Wireless Broadband India, which holds 20 MHz of BWA spectrum in the Madhya Pradesh and Chhattisgarh telecom circle. The operator is reportedly also in talks with Aircel for acquiring spectrum in the 2300 MHz band.

Although the operator has a first-mover advantage, this does not mean that the journey is going to be easy, especially given the imminent launch of 4G services by RJIL. To attract users in large numbers, Bharti Airtel has slashed 4G tariffs, bringing them down to 3G price points. Further, add-ons such as unlimited mobile voice calls, bundled movies and music packs, and a mobile application giving users access to a vast collection of videos are being used to encourage 4G uptake. Bharti Airtel has also tied up with mobile retailers to allow users to opt for home delivery of 4G SIMs on buying handsets of specific brands. The prices of these 4G-enbled phones start at as low as Rs 4,000. For its existing customers, Airtel is offering home delivery of 4G SIMs.

RJIL

Even though RJIL has done significant groundwork in terms of deploying robust physical network infrastructure and developing applications and content, commercial launch is yet to take place. After several revised timelines, it is expected that the services will commence in December 2015. Equipped with a pan-Indian 4G-suitable spectrum and the backing of Reliance Industries Limited, RJIL is likely to emerge as a formidable player in the 4G space. Given that it has spent the past two to three years carrying out rigorous groundwork and trials, it is expected to fare much better than its counterparts and may even steal a march on Bharti Airtel, which has been operating in the 4G space for over three years, but has only recently scaled up its operations. Further, the industry expects RJIL to touch new lows in 4G tariffs, which may dilute the profit margins of its competitors in this space. As per industry reports, RJIL will launch tariff plans of Rs 300-Rs 500 per month on devices priced as low as Rs 3,000-Rs 4,000.

Recent reports about an RJIL-RCOM partnership for sharing and trading of 4G spectrum may also impact incumbents’ business adversely. RJIL stands to gain from RCOM’s existing user base, the majority of which will be accessible to RJIL through the arrangement. Also, following a tie-up with RCOM, RJIL would be able to offer voice services to its subscribers using circuit-switched fallback technology, in addition to voice over LTE and voice over Wi-Fi.

Vodafone India

While the operator believes 3G is the main growth driver in the medium term, it is ready to test the waters in the 4G space. Vodafone India plans to launch 4G services using spectrum in its 1800 MHz band in Mumbai, Delhi, Kolkata, Karnataka and Kerala in a phased manner. These are fast growing data markets and together account for close to 50 per cent of the total data revenue.

Recently, Vodafone announced that it will initiate the first wave of its 4G roll-out in the Kerala circle by end-December 2015. In the initial phase, services will be offered in Kochi, Thiruvananthapuram and Kozhikode.  Simultaneously, 4G services will be rolled out in Mumbai, Delhi, Kolkata and Bengaluru as well. Since March 2015, Vodafone has invested over Rs 3.5 billion and Rs 5 billion for network upgradation in the Kerala and Mumbai circles respectively. Sizeable investments have also been made in other circles. The operator is investing heavily in high capacity fibre roll-out to enhance internet connectivity.

Vodafone also stands to gain from the global experience of its parent group in the 4G space. The UK-based telecom giant has already launched 4G in 18 countries. The group currently has over 20 million 4G customers.

Idea Cellular

The operator plans to roll out 4G services in six service areas across Kerala, Madhya Pradesh, Maharashtra, Punjab, Haryana and Andhra Pradesh by end-March 2016. Together, these circles  account for 53 per cent of Idea’s revenues.

The company intends to roll out 4G services in 750 cities and towns across 10 circles in the first phase, which is likely to be completed by mid-2016. To this end, Idea is planning to roll out 30,000-35,000 3G and 4G cell sites over the next nine months. The company plans to invest close to Rs 10 billion for launching 4G services.

RCOM

In order to avoid losing out on the 4G opportunity, RCOM has decided to enter into a strategic partnership with RJIL for trading and sharing 4G airwaves in the 800 MHz-850 MHz band. Further, the operator is contemplating merging its operations with Sistema Shyam TeleServices Limited (SSTL), which will bolster its potential 4G reach. Together, SSTL and RCOM have LTE spectrum in the 800 MHz band in the majority of circles, and there are less than 10 service areas where RCOM would have to turn to RJIL’s spectrum.

Others

Aircel is currently offering 4G services to enterprise clients through leased lines and Wi-Fi devices. While it has stated that it will increase the number of 4G sites in all of its eight licensed circles by end-2015, the service launch timeline is not clear. The operator plans to deploy 13,000 sites across the 2G, 3G and 4G platforms during 2015. Of these, 5,300-5,400 sites are reserved for the 2G network, while the rest will be dedicated to 3G and 4G networks. Over 50 per cent of these sites have already been rolled out.

Meanwhile, Tikona Digital Networks has recently announced its plans to start offering 4G services across 30 cities in its five telecom circles in the first half of 2016.

Conclusion

These operator plans paint a promising picture for 4G services in India. If oper-ators are able to deliver on these plans, the industry can expect a major transition to 4G services by the end of next year.