Bharti Airtel likely to shut down 3G service in next 3-4 years

Telecom major Bharti Airtel is likely to shut down 3G service in next 3-4 years and refarm the spectrum linked with it for 4G services, a top official of the company said.

“There is almost no spent that we are doing on 3G. Our view is in next 3-4 years we are likely to see 3G network actually shut down faster than 2G network because there are still 50 percent of phone being shipped out in India that are feature phones,” Gopal Vittal, MD and CEO, India and South Asia, Bharti Airtel, said during earnings call on Wesdnesday.

He said that the company is investing in 4G technology to build more data capacity in the network.

The company will use 2100 megahertz band, which is used for 3G services, for 4G services.

“Where we have second career of 3G or third career then through flip of software you get incremental capacity on 3G.  Most of that spectrum will finally go towards 4G for which we will need to have radio units,” Vittal said.

He said that in some telecom circles the company has installed modern 3G equipment which can support 4G services but the initially deployed equipments for 3G services will need to be replaced.

“Some of the older radios are pure 3G which we need to replace. It will take its time. I think that the answer for that will be function of how fast pick up of voice happens on VoLTE (4G voice call network). The moment that happens voice will not be required to be carried on 3G which can help reafrm us 2100 Mhz for 4G,” Vittal said.

The telecom major yesterday posted sixth straight quarter of drop in earnings as its consolidated net profit plunged 76.5 per cent to Rs 343 crore for the September quarter comapred to Rs 1,461 crore it registered in the same period a year ago.

However, it recorded four-fold growth in the mobile data traffic during the reported quarter in India, and its mobile broadband customers rose by 33.6 percent to 55.2 million.

An Airtel representative on the call said that revenues will be further hit to the tune of 4 percent of its consolidated EBIDTA or around Rs 300 crore in the ongoing quarter due to reduction in mobile call connection charges to 6 paise applicable from October 1.

Mobile companies charged 14 paise a minute for allowing a domestic call from a rival operator to terminate on their network before October 1. The Telecom Regulatory Authority of India, the body which determiines it, has made it 6 paise per minute from October 1, 2017.

The consolidated revenues for the just-ended quarter, at Rs 21,777 crore, represented a year on year drop of 10.4 percent (reported drop of 11.7 per cent) on an underlying basis when adjusted for Africa and Bangladesh divested operating units and tower asset sale.

In a separate development, Airtel announced transfer of its optical fibre business to its wholly-owned subsidiary Telesonic Networks for a valuation of up to Rs 5,650 crore.