India, one of the biggest markets for telecom services with more than a billion customers still has millions of people users 2G network for communication purposes. 2G is not fit for internet browsing, but only voice calling and SMS. Even when 4G services are readily available almost everywhere, there are affordable 4G smartphones, and cheap tariffs, why India still has 2G networks?
It would be safe to assume that 2G network users are old people who used 2G services when it was launched. Most of these consumers might feel like they don’t need anything out of their mobile except for voice calls. Thus, they don’t really have any incentive to upgrade to 4G networks.
2G Has Become a Money Draining Part of the Sector
2G services don’t really bring in the average revenue per user (ARPU) figure for the telcos that they would like. Further, with 2G there’s one more big problem — the telcos can’t upsell their other services as it requires a steady internet and a smartphone for the customers to be able to consume them in the first place.
If you are wondering why are the telcos are not simply shutting down 2G, here’s the thing. All the telecom operators have millions of 2G customers, except for Jio. Reliance Jio only has 4G networks PAN-India.
One way to look at this would be if the other operators shut down 2G, the next cheaper alternative for the consumers would be either Bharat Sanchar Nigam Limited (BSNL) with 3G services but a poor network or Jio. Here, Vodafone Idea and Bharti Airtel stand to lose the most.
Bharti Airtel wouldn’t be worried about a declining user base as long as low ARPU customers are going out. But Vodafone Idea would want to cling on to these customers as it already has a severely lower subscriber base in comparison to other private telecom operators.
Further, if the telcos were to shut down 2G right away, there are a lot of people who still don’t have smartphones that can support 4G. Thus to ensure that all the customers are getting network connectivity, the telcos can’t really shut down 2G any day they like.
