Here’s why Kerala has become a new playground for 4G players

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Vodafone started its 4G innings in India by launching its LTE service in Kochi last week. Just a week later, the company has added Trivandrum to its 4G LTE map, and will soon launch those services in Calicut. Kerala is getting this attention even though more lucrative metro cities like Mumbai, Delhi, Kolkata, and Bengaluru are still awaiting 4G services.

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Why did Vodafone chose Kerala over metro cities?
Vodafone launched 4G LTE services in two cities in Kerala within a span of two weeks. If you are wondering why the company chose Kerala, their press release points out the following reasons.

  • Ranked #1 in India in terms of Human Development Index
  • Ranked as second most urbanised state in India
  • Smartphones growing at over 65 percent YoY
  • Data consumption growing at over 80 percent YoY
  • Data Revenue growing over 75 percent annually
  • Kerala has globally-aware and tech-savvy customers

Apart from the reasons officially stated reasons, we believe that Vodafone choose Kerala as it was much easier and faster to roll out 4G network there. Compared to big metro cities, Kochi and Trivandrum are relatively small in terms of geographic area and population.

Vodafone was able to rollout its 4G network in a short span of six months after the official announcement and technically met its deadline of December 2015. As per the latest reports, Phase 1 rollout of 4G networks in Kerala, Karnataka, Mumbai, Kolkata, and Delhi will be completed by March 2016.

First circle in India to have two 4G operators and four by 2016

Idea Cellular rules the data market in Kerala, thanks to its vast 3G network. Neither Vodafone nor Airtel could challenge Idea’s strong position as they lack 3G spectrum in the circle. However, Airtel was the first operator to launch 4G service in Kerala, which is now available in four cities. Airtel was not seen as an immediate threat to the market leader Idea as it lacked more efficient 900MHz spectrum for 2G service, and was positioned fourth behind BSNL in the circle.

Vodafone comes packed with double power of 4G and 3G. The company is simultaneously deploying 3G network alongside 4G network. Vodafone, who is already positioned at the second best spot in the circle, wants a larger pie of premium data market.

Idea Cellular-dominated 3G market is now being challenged by 4G service from Airtel and Vodafone. To prevent the erosion of its high ARPU data subscribers, market leader Idea is readying its own 4G network. With Idea 4G network going to be live soon, Kerala is the only state in the country to have two 4G players, and it will soon get its third 4G operator. After the launch of Jio 4G service sometime next year, the circle will have four strong 4G players.

Kerala is the premium data market with five 3G and two 4G operators

It is evident that people in Kerala prefer 3G over 2G. The high-smartphone penetration in the circle has created a huge demand for 3G data. Idea, which has 80 percent 3G coverage in the circle, has highest amount of 3G users. The second biggest 3G player is BSNL, which has covered 60% of the circle. BSNL is continuously expanding its 3G footprint in the circle to catch up with Idea. While Idea is set to start its second innings in the premium data market with 4G services, BSNL still hasn’t made any solid plans for 4G service rollout.

While all the big players are ready with 3G and 4G services, the three small players – Reliance Communications, Tata DoCoMo, and Aircel – may not survive the 4G storm. Reliance Communications may bank on Reliance Jio for launching 4G through ICRA or use MTS spectrum for 4G service after the said merger. Tata DoCoMo, which already failed to expand its 3G network beyond a few cities, may not survive in a premium data market like Kerala. Aircel, which scaled down the operation in the circle, will mostly likely exit the circle soon after selling its 2G and 3G spectrum to others.

Reported By

An IT professional who has got great passion for telecom. Has been closely watching Indian telecom space since 2009.

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