Bharti Airtel and Vodafone Idea customers will be able to enjoy better network services and increased 4G speeds with better coverage as well. A new ET Telecom report highlights that both the companies are looking forward to refarm the bulk of their 2G and 3G spectrum to be used for 4G services, the analysts have remarked. Previously, we have heard from Bharti Airtel CEO, Gopal Vittal that the telecom operator has refarmed the 900 MHz spectrum in 10 of its circles to be used for 4G services. Bharti Airtel also plans to shut down its 3G services by the end of December this year. With this, the telco will also use the 2100 MHz spectrum for relaying 4G services.
Vodafone Idea to Complete Network Integration by June 2020
On the other hand, Vodafone Idea CEO, Balesh Sharma had also remarked in late July that the company had refarmed the 900 MHz and 2100 MHz spectrum in seven circles to be used for 4G network. He also added that the dual network integration of Vodafone Idea would likely be completed by June 2020 and that the refarming of the spectrum would be a key element in the integration process. This move is likely to result in better 4G services for the customers of both Airtel and Vodafone Idea in many circles.
As per the analysts, both the carriers could outcompete Reliance Jio Infocomm when it comes to getting quality 4G customers as the total airwaves that these two telecom operators will be holding will be more than what the Mukesh Ambani led telco will have in its share post-refarming. According to the estimates filed by ICICI Securities, Bharti Airtel and Vodafone Idea will have 28% and 33.1% more 4G carriers as compared to Reliance Jio post the refarming of 3G and 2G spectrum. The 4G data consumption is also expected to rise sharply in the coming days. The current average data usage is 11.6GB per month per person as opposed to the 45GB monthly data allowance per month. The 4G penetration levels currently stand at 41%.
Spectrum Refarming Crucial for Both Vodafone Idea and Bharti Airtel
Out of the total liberalised spectrum, Vodafone Idea and Bharti Airtel command around 40% and 35% market share. Whereas, Reliance Jio commands 26%. ICICI Securities also remarked “refarming of 2G/3G airwaves would further boost their 4G holdings by nearly 62% and 42.5% respectively, which would enable both incumbents to “exponentially expand data capacity at minimum capex.”
Reliance Jio, however, still has more base stations and fiberised cell sites and the telco also “leads in data capacity with a 59% data usage market share.” The data throughput of the telco is also 2.6x and 3.2x higher than Airtel and Vodafone Idea, respectively. According to the experts, the refarming of spectrum to avail better services to the consumers and to accommodate new 4G customers in to the network is very crucial for both the incumbent telcos given that Reliance Jio is planning to amass 500 million customers, a goal that would mean that Reliance Jio is likely to price its services competitively.