Bharti Airtel plans 4G voice network in counter to Jio
NEWDELHI: Bharti Airtel Ltd plans to take on Reliance Jio by launching its own VOLTE (a 4G voice network) service by March 2018, and working with phone makers on new low-cost 4G feature phones, Gopal Vittal, CEO and MD of Airtel said during a call with analysts.
On Friday, Jio announced the August launch of the JioPhone, a 4G feature phone that the firm plans to make available to users, effectively for free. Since then, analysts have said that rivals, such as Airtel, have no option but to partner with phone makers and do something similar.
On Tuesday, Airtel announced that its net profit fell to ₹367 crore for the three months ended June 30 from ₹1,462 crore in the yearago period. The company’s third straight decline in quarterly profit was caused by Reliance Jio Infocomm Ltd, which has embarked on a price war since its launch last September.
Jio started charging customers in April, explaining Airtel’s better-than-expected performance in the June quarter (analysts polled by Bloomberg had predicted a ₹282-crore net profit), but Friday’s Jiophone announcement opened up a new front.
At the moment, Airtel does not want to react to JioPhone as it does not want to subsidise and manage inventory, Vittal said, but it will intensify bundling and expects device makers to come up with feature phones, which have 2G, 3G, 4G and dual sim facilities.
“We have no intention to get into subsidising devices and running the inventory as if we own them. There is a difference between subsidising and bundling. We have done that on the smartphone side for many years. We will continue to look at bundling,” Vittal said.
He also mentioned that with 4G attracting more users and 2G still holding up, it is 3G telecom networks that will shut down first in India. Airtel has not taken a call on shutting its 3G network yet, Vittal clarified.
Despite the entry of high-speed 3G and 4G, 300 million Indian customers still use 2G networks, primarily to make voice calls. A top industry executive from a rival firm who spoke on condition of anonymity said 3G will “come a cropper” since 4G speeds will be higher than 3G. 2G price points are still so low and devices are simple to use, so they will remain in vogue, the executive added.
During the analyst call, Airtel executives also said the company will look to monetise the roughly 10% stake its wholly-owned subsidiary Nettle Infrastructure holds in its tower unit Bharti Infratel. The management did not offer a timeline for the process.