Airtel to shut down 3G network by March next year

Bharti Airtel will completely shut down its 3G network by the end of the current financial year and utilise the spectrum in the band to offer 4G services. The 3G customers will be shifted to the 4G network.

Talking to analysts on a conference call a day after declaring its first quarter results, Gopal Vittal, MD and CEO, Bharti Airtel (India and South Asia), said that by September this year, 3G will be shut down in 6-7 circles, and all the remaining circles will be done by March next year.

The company in June this year had shut down its 3G network in Kolkata, becoming the first incumbent telecom operator to do so. The spectrum used for offering 3G will be reframed for 4G services.

Vittal also said by next year, the company will be utilising most of its airwaves for offering 4G services and just about 5-8 Mhz spectrum (primarily administratively allotted) in each circle will be used for offering 2G services.

“Going forward, Airtel will offer 2G and 4G services and shut down 3G completely,” Vittal said. Airtel’s 2G customers constitute around 70% of its user base while the rest are 3G and 4G. The company has a total spectrum holding of around 946.7 MHz across country in various bands including 900 MHz, 1800 MHz, 2100 MHz and 2300 MHz etc.

The 3G technology, which came into the country in around 2011, has seen the fastest eclipse, primarily because of the uptake of 4G after the entry of Reliance Jio, which is only offering such services.

The company will try to upgrade its 2G customers to 4G in order to increase the average revenue per user (ARPU) as the impact of minimum recharge plan of Rs 35 has bottomed out. A couple of quarters back, the company had introduced the minimum Rs 35 plan due to which it lost around 45 million customers in Q4 of FY19 and about 1.5 million in Q1 FY20. As a result of the plan, Airtel’s ARPU has increased to Rs 129 in Q1 of current fiscal.

Even though Airtel has lost subscribers on net basis but when it comes to 4G, it added 8.4 million customers taking its 4G user base to 95 million and overall data customer base to 120 million. Airtel’s per customer data usage has even overtaken Reliance Jio.

Vittal said going forward, the company would like to stop the churn in subscriber base and upgrade 2G customers to 4G through loyalty programmes like Airtel Thanks etc.

The company is also exploring carrier billing and advertisement on its over-the-top (OTT) apps to increase revenues. An official in the company told Financial Express that Airtel has tested carrier billing with Netflix and it can be extended to other apps also. The company is offering free subscription of Netflix for three months to customers having plan of Rs 499 or above and after the free period ends, customers can pay for Netflix subscription through their Airtel and the amount can be part of the mobile bill. Regarding advertisement, Airtel has tested the service in Wynk music app but has not commercially rolled out. However, an advertisement model is in works.

Asked by an analyst about fibre monetisation, the company said it continues to evaluate opportunities that come up. Badal Bagri, chief financial officer of the company said all the fibre assets have been moved to 100% subsidiary and all the approvals are also in place.