Airtel, which is the only player to launch 4G services in India, is ramping up services to face impending competition from Reliance Jio, the 4G arm of Reliance Industries, which plans to launch services between September-December this year.
Airtel, which has 4G presence in six towns in India, and recently began offering 4G at 3G prices on handsets, has so far not been able to create waves in the market.
At least four other players – Idea, Vodafone, Aircel and MTS – too are lining up 4G services in the next two years.
Airtel plans to deploy 5,000 additional towers -- including those of Indus Towers and Viom Network along with its own -- in its 4G circles, to improve network and ensure consistent speeds. Quality has been an issue with a lot of people giving back dongles.
According to sources, Airtel will also start launching 4G in circles where it doesn't have 3G -- a strategy other 4G players may adopt as both 3G and 4G can be now offered on the same 1800 MHz spectrum band.
However, an Airtel spokesperson denied these reports saying, "Airtel can offer 4G services in those circles for which it has a licence".
Another player, Russia-backed MTS is looking to launch CDMA-based 4G, by boosting its existing 3.75 MHz CDMA spectrum with another 1.25 MHz from the next CDMA auction.
MTS, however, will only focus on 4G data via dongles, while other 4G players are playing in both voice and 4G handset space.
MTS, which gets 20-30% of its revenues from voice, is looking at 25-30 million customers for data including 4G.
An MTS spokesperson said, "MTS India is waiting for clarity to emerge on the pricing and subsequent auction of 800 Mhz. If the pricing issue is resolved, then MTS India would like to participate in the auctions.
The long-term plan is to have at least 5 Mhz of contiguous spectrum in the 800 Mhz band, enabling us to launch LTE services."
RJio, on the other hand, has almost finalised its launch strategy – with 80,000 towers in the first phase in 800 towns from Reliance Infratel, Bharti Infratel, Viom – and a not-yet-closed 25,000 tower deal with Indus towers. In phase two, RJio will raise its tower footprint to 125,000 -150,000 towers for pan-India presence in two years.
Samsung – RJio's exclusive network partner -- is already occupying a floor at DAKC, the RJio's headquarters in Mumbai, as per sources, and the sub-$100 4G handset deal with Samsung is soon to close. As per industry sources, speaking on condition of anonymity, RJio will use its recently-won 1800 MHz spectrum in 14 circles for 4G data as well as 2G voice, with their pan-India 2300 MHz being used for 4G backhaul.
Given its data-first focus, RJio will focus on earning 60-70% of revenues from data and 30-40% from voice – the reverse of most telcos today, which have 85% voice and 15-20% data focus.
"This year, in fact, telcos are looking at 12% growth rates – 6-7% that is expected to come from voice tariff increase, 3-4% from data revenues and 1-2% from new customer additions," said a source requesting anonymity.
Thus, the feared voice tariff war with RJio's entry may be low-key, even as telcos look to raise voice tariffs by 7-8% this year to aid in their 2G spectrum payouts.
Even on the data side, RJio may not offer very low rates of 1 paise/kb, as focus will also be on better network quality compared to peers and competitive content. "Between 'Monsoon Hungama' in 2003 and now – there have been an addition of about 700-800 million users who are all used to a certain quality of network. Thus, not more than 30-40 million users may switch to RJio only because of lower tariffs," said an industry expert.
Thus, content and fiberisation of 4G sites will be the main focus for RJio.
"In terms of 4G data content, RJio is building a lot of partnerships with several players, besides plans to launch its own app store, and a huge focus on video," said an industry source.
Airtel and RJio declined comments for this story.