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We won’t be able to afford 700 Mhz spectrum: Gopal Vittal, Airtel India CEO

Airtel 4G

“We believe that the price that has been set or proposed for 700 MHz just makes it very, very expensive for us to buy any of that spectrum, so we believe we cannot afford to buy that spectrum at that price,” Gopal Vittal, Airtel India CEO said answering a query from analysts.

Earlier in January, the Telecom Regulatory Authority of India (TRAI) had recommended a reserve price of Rs 11,485 crore per MHz for pan India airwaves for the next round of auctions.

This includes the base spectrum pricing for seven bands, including the 700 MHz spectrum which is being offered for the first time and supposedly offers high quality mobile broadband and 4G. The spectrum auction could fetch the government Rs 5.36 lakh crore if frequency is sold at Rs 11,485 crore per MHz. The 700 MHz band spectrum could independently cost Rs 4 lakh crore at the same price.

Although, Vittal emphasized the importance of the 700 Mhz band of spectrum for the company’s 4G services offering.  “I just will say that 700 MHz is a valuable spectrum, because it has great propagation characteristics. It has to be balanced with the fact that ecosystem that you have on 700 MHz in terms of devices and chipset is still very nascent,” he added.

The management at Airtel declined to give the number of 4G users in the country. The last time Airtel disclosed its 4G subscribers was in January 2014 and the company reported that it had crossed the 100,000 connections. However Vittal had mentioned in a call earlier that the adoption of 4G devices increased dramatically in the preceding quarter. “Two quarters ago, a million handsets were being shipped on 4G. Last quarter it was close to 5 (million), and we believe that this quarter it will be close to 10 million. The ecosystem is evolving rapidly,” he said.

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Airtel’s mobile Internet base increased 7.54% q-o-q to 54.86 million connections in Q3 FY16. The total number of 3G connections stood at 28.09 million.  Airtel is the second mobile operator where 3G subscribers are more than 50% of its data connections. Reliance Communications earlier this month reported that nearly 60 of its data connections are on 3G.

Other developments in 4G

– Earlier this month, Vodafone India completed the first phase of its planned 4G rollout under the 1800 MHz band with the launch of its services in Mumbai. Vodafone also launched their 4G network under the 1800 MHz band in early February 2016 in telecom circles: Delhi, NCR cities, Bangalore and Kolkata; as well as in Kerala circle Kochi in Dec 2015 & Kozhikode on Jan 2016.

– In January, Telecom operators Reliance Communications (RCOM) and Reliance Jio entered into a strategic partnership to share spectrum to provide LTE services. RCOM and Jio have signed agreements in spectrum allotment in 800 MHz band across 9 Circles from RCOM to Reliance Jio. The companies also agreed to share spectrum in 800 MHz band across 17 Circles.

–  After launching its 4G services for employees only on the 27th of December, Reliance Jio  said it will be launching its 4G offerings commercially starting March 2016. However, Mukesh Amabani, chairman of RIL said that Jio’s commercial services would be pushed to the second half of 2016. This Overall, RJIL currently claims to have given out 70,000 4G mobile connections to its employees for testing ahead of the commercial launch.

– In December 2015, Idea Cellular launched its 4G services in 5 south Indian states; Andhra Pradesh, Karnataka, Kerala, Telangana and Tamil Nadu. The initial launch will cover 75 towns including Mysore, Kochi, Vijayawada and Vishakhapatnam.

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