Indian telecom service providers geared to roll out 4G LTE services

A spurt in the number of smartphones in India in the recent past has led to an increase in demand for the improvement of services, with the country's major telecom service providers preparing to roll out 4G LTE mobile services in several states in the next couple of months.

The soft launch of 4G services by telecom majors Reliance Jio Infocomm, Idea Cellular, Bharti Airtel, and Vodafone started in December last year and the companies have been on an announcement spree to lure as many customers as possible.

While Airtel has launched pan-India $G services in 296 towns, Idea said that it will launch 4G services in 39 cities and towns in Karnataka soon.

Reliance also soft-launched the services for its employees on December 28 last year and is planning a commercial launch for March or April this year. Vodafone, the second-largest telecom service provider in the country, started the services at the end of 2015 and is offering 4G at the rates of 3G.

According to a report by Bank of America Merrill Lynch, India is expected to have 90 million 4G subscribers from near zero at present, and a 4G smartphone base to reach 180 million by 2018 compared with 5 million in 2016.

The report further said that there will be a marginal difference between 3G and 4G tariffs, as well as a decline in smartphone prices that may lead 2G subscribers to leapfrog to 4G services, skipping 3G.

The report estimated the 4G market share of these big three telcos to surge from 53 percent in 2016-17 to 60 percent by 2019-20. However, it further added that Reliance Jio would have the largest subscriber market share in the 4G segment, and that by 2019-20, Jio will have close to a 40 percent share in the Indian 4G subscriber market.

Another report by Strategy Analytics said that India would overtake Japan to be the world's third-largest 4G LTE market by 2016, and would also surpass the US to be the world's second largest smartphone market by 2017.

"This is fuelled by the fact that the Indian government has spent $32 billion on 4G services -- clearly making 4G the next generation technology driving by handsets and telecom players," the Strategy Analytics report added.

In an interview with private news channel ETV a couple of weeks ago, Indian Minister for Communications Ravi Shankar Prasad said that 4G technology will prove to be a game-changer in India. "I approved the proposal of 4G. You will have 4G from Reliance Jio, Airtel, Idea, and others and I want there to be competition," Prasad said.

According to him, 4G technology promises a vastly improved online experience with faster web browsing, downloads, and video-on-demand, besides being a facilitator for a variety of social services, online healthcare, education, and governance.

Speaking to ZDNet, Cellular Operators Associaton of India Director General Rajan S Matthews said that there was significant demand for the 4G LTE services from the consumers and the companies decided to introduce them for speedier connectivity.

Admitting that the existing network was not satisfactory, Matthews said: "There is a need for adequate infrastructure -- which requires more than $2 billion in investments -- in the next two to three years to further strengthen the network as downloading video content requires more bandwidth."

Even to get permission to erect a tower, the companies have to pay 2 lakh rupees in fees to the local civic authorities besides rentals for the land to install the tower.

Matthews said that mopping up resources will be a major challenge for the service providers as they are reeling under severe debt and were working with the Indian government to sort out the issues.

On whether the tariffs would benefit consumers, Matthews said that each telecom company will be given a licence for 20 years and they have to make profits within that time. "It will be a challenge for the industry as every round of auction of spectrum is getting more expensive and hence there will be upward pressure on tariffs," he added.