With Reliance Jio readying for its 4G launch come 2014, and Bharti Airtel having acquired additional circles from Qualcomm for expanding its existing 4G services, there is high chance that competitor Vodafone will likely jump on the 4G bandwagon sooner or later, given that it had 155 million subscribers at June-end (41.2 million of them being data subscribers).
Five reasons point to this possibility. One, Vodafone is flush with cash after its $130-billion deal with Verizon Wireless in the US. Two, AT&T, a strong 4G player globally, is reportedly circling Vodafone for a possible buyout as early as next year. Three, parent Vodafone of the UK will likely buy out its Indian unit and fund expansion of the subsidiary’s operations. Four, Vodafone has recently increased its focus on enterprise and fixed-line services which contribute to around 50% of its overall India revenues. And five, mobile data is another area where Vodafone has strong play, having recently unified its 2G and 3G data tariffs. Taken together, the five factors suggest that Voda can’t put off its 4G plunge in India for long.
Telecom experts believe the key to 4G gains in India for any telecom company (telco) will be a mix of voice and data, an established network and a broad subscriber base. Vodafone ticks all these boxes. Besides being India’s second largest operator after Airtel, Vodafone boasts access to technology-neutral spectrum and unified licences.
But Vodafone itself did not answer queries about its 4G plans. However, telecom experts believe Vodafone, given its large number of enterprise customers, is a strong candidate for 4G play in India.
Sandip Biswas, CEO of Lacewood Consulting, said, “Currently, 2G and 3G mobile data is not very efficient or consistent as it uses microwave backhaul. However, 4G, which operates on optic fibre, will provide seamless and superfast connectivity. Going forward, telcos may offer a mix of 2G, 3G and 4G. Vodafone may seek to acquire another player with the necessary spectrum to launch 4G services and increase its user base.”
An industry source said Vodafone has the required number of towers (1.10 lakh) and fibre capacity (1.25 lakh km) as well. Only, it may wait till Jio launches its 4G services before making its moves.
Given Jio’s pan-India launch, telcos like Vodafone may also need 4G to keep existing market share. But cheap 4G handsets and network upgradation remain a concern. So, Vodafone may use Airtel’s strategy of a trial 4G launch in a few circles initially, said an industry source.