Bharti Airtel will soon expand its VoLTE coverage across pan-India to reduce the call costs. For the unaware, Trai recently cut down the Interconnect Usage Charges (IUC) by 57%, which now became to 6 paise per minute. This change from Trai will hurt the incumbent telecom operators such as Airtel, Vodafone, and Idea badly.
Now, top analysts from BofA Merrill Lynch and CLSA say that the top three telecom operators will try to move to VoLTE technology at the earliest. Moving to VoLTE will ensure cost-effective business without any hassle of IUC.
Sachin Salgaonkar and Karan Parmanandka, research analysts at DSP Merrill Lynch India said VoLTE rollout will be key to keep costs down. The move to a bill and keep (B&K) regime from 2020 would force existing telecoms to upgrade their networks to VoLTE as telecoms would like to migrate their traffic to VoLTE to reduce cost.
Bharti Airtel recently rolled out VoLTE services in Mumbai and confirmed to cover entire India by March 2018. Furthermore, analysts predict that Airtel is best placed to roll out VoLTE services at the earliest, while Vodafone and Idea Cellular will take more time to shift to VoLTE. Analysts predict that Vodafone and Idea will be nine months behind Airtel in rolling out the VoLTE.
CLSA also said that Airtel, Vodafone, and Idea will launch VoLTE very soon, while Reliance Jio will use the IUC charges to expand its 4G coverage across the country. At the moment, Jio has 120,000 4G towers across India, which is expected to become 160,000, and also 200,000.
“Jio might also use the potential savings to improve its coverage from current 120,000 towers to 160,000 and eventually to 200,000,” Bank of America Merrill Lynch said in its report
Deepti Chaturvedi and Akshat Agarwal of CLSA said the reduction in IUC will increase the profitability of unlimited voice calling plans thus incentivising operators to offer them to all subscribers.
Furthermore, small telecom operators such as Telenor, Aircel, RCom will most likely benefit from the lower interconnect call charges, but the operators may not be able to upgrade networks to VoLTE. As a result, these small operators will likely offer unlimited voice call plans at very cheaper rates.
