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Videocon to offer 4G service at 2G rates

Co first telco to launch 4G services in 1800 MHz band; to invest Rs 1,200 crore in three years to roll out services in three circles

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Cities like Saharanpur, Meerut, Dehradun, Patna, Jamshedpur and Jhansi in Uttar Pradesh (UP) and Bihar could soon get 4G (fourth generation) services at 2G (second generation) rates with Videocon Telecom announcing the launch of 4G services in the 1800 mega Hertz (MHz) band in the three circles.

What this means is the telecom company would be using spectrum in the 2G band for rolling out 4G services, which will improve the downloading speed by 30-40 times but its price would be same as 2G.

Videocon would be first company doing this in India with a plan to invest over Rs 1,200 crore in the next three years. A recent report by Global Mobile Suppliers Association (GMSA) revealed that of the total number of operators around the world who were offering 4G service, 44% of them used 1800 MHz band for rolling out 4G services.

Arvind Bali, director and CEO of Videocon Telecom said the company would be using 5MHz spectrum in UP (west & east) and Bihar circles to offer 4G on 1800 MHz band only in some pockets as ecosystem for it is still underdeveloped.

"We will launch the 4G services (1800 MHz bandwidth) only in some of the cities as the ecosystem for it has not been completely developed. The penetration of 4G handsets is less than 0.5% in the country and it is especially low in circles like UP (west & east) and Bihar," he said.

He said the speed of 2G services in other circles is currently 2-4 megabyte per second (mbps); this could go up to as much as 50 Mbps.

In the spectrum auction, which the government is going to hold on March 4, the base price of spectrum in the 1800 MHz band is the lowest at Rs 2,191 crore per MHz. The telecom ministry has fixed the floor price of Rs 3,646 crore per MHz in the 800 MHz band, Rs 3,980 crore for 900 MHz band and Rs 3,705 crore per MHz for the 2100 MHz band.

Interestingly, most operators continue to use spectrum in 1800 MHz band for 2G mobile services. Bharti Airtel, Idea Cellular, Vodafone and Reliance Jio Infocomm also have plans to use 1800 MHz spectrum band for 4G services.

Airtel and Aircel have launched 4G services using airwaves in 2300 MHz band in some pockets while Reliance Jio has yet to launch its services.

According to experts, development of 4G ecosystem will bring down cost of mobile devices for consumers and cost of equipment used by telecom operators for building networks.

Videocon Telecom has decided not to participate in the auction as it still had a lot of unutilised airwaves with it.

"We might need some add-on airwaves in circles like Gujarat, Haryana and others which can be acquired through spectrum trading and sharing once the government comes out with guidelines for it," said Bali.

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