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With 4G business strengthening, Airtel to shut 3G services

Airtel has decided to end its 3G services, which were once hailed as the fastest for data downloads. With high speed 4G service increasingly expanding and defining the mobile ecosystem across the country, the telecommunications company will bring down the curtains on the 3G services.

The penetration of highly affordable 4G devices in the country is another reason for the transition, which will be made in the next few years. The decision is also driven by stiff competition from new entrants like Reliance Jio which is a 4G only service and promises faster downloads to the users. CEO of Airtel India’s operations, Gopal Vittal said the investments in 3G are being scaled down and the company is working on strategies to re arm the 3G spectrum for the provision of 4G services. However, the 2G network which is mainly used for voice operations will survive longer. 3G will be shut down faster than the 2G network, mentioned the CEO. The company reported a 77% decline in the net profit but more than 300% surge in data usage per subscriber. With the increased penetration of smartphones across the country, users are demanding higher speed and internet connectivity on their phones. This has led to an increase in the demand of 4G and with the data plan offers; using 4G has become much cheaper.

There is a large population in the country which uses feature phones. A majority of low priced devices available in smaller towns and rural areas are 2G phones. Earlier, 3G was the most coveted service and mobile and data companies went over the top while bidding for the 2,100 MHz spectrum on which the service was offered. This was evident in the 2010 auctions which brought in record revenues for the telecom department.

However, there has been a rapid change in the industry with the advent of 4G in the last one year. This has prompted companies to change the track and upgrade faster. 4G prices are at the same level as 3G tarrifs. The company aims to build capacities for 4G on the 2,100 MHz spectrum. Companies are eyeing 4G subscribers with an affordable bundle of offers which is changing the situation in the country. Jio has come out with a Rs 1,500 4G feature phone that promises free calling and offers certain data benefits to the customers at a nominal tariff plan. In addition, the customer can also seek refund of money paid for the device after three years. Airtel has also tied up with Karbonn for a low cost smartphone and it is expected that Idea and Vodafone will also follow suit. 

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