4G Subscriptions To Gear Up In India By 2013: [Report]

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Bharti Airtel is the first player that introduced 4G services in India–launched 4G TD-LTE  services in Kolkata in April and Bangalore in May of this year. However, the services provided by the telco seem somehow expensive and the market is still struggling to have cheaper 4G supporting mobile handsets. Despite of these, Bharti-Airtel has reported 3,180 TD-LTE subscribers in its two zone–Kolkata and Bangalore. It’s well known that Airtel has Broadband Wireless Access (BWA) licenses in just four circles–Kolkata, Karnataka, Punjab and Maharashtra–, while it succeeded to manage 3G licenses in 13 Zones. Recently, Bharti Airtel signed a deal with Qualcomm which will enable the telco to deploy its 3G and 4G networks nation-wide in 18 circles.

Just a few months before, I described why there’s need of to disseminate 4G networks in India and really the country needs 4G services. Besides, Mukesh Ambani owned Reliance is also going to begin its innings in 2013 and definitely, his entry into the 4G-LTE networks will strengthen the segment. He has also planned to repeat once again “Monsoon Hungama” what he did prior to leave Reliance Communication for his brother—revolutionized the telecom sector. At this time, he has planned to offer 1 GB of data download for just Rs 10.

However, at present, 4G dongles are costlier and the services which are being provided by Airtel is also somewhat expensive, but the scenario will change next year. It’s expected that Indian telecom operators will focus on subscribers baseline addition and which is only possible when they will offer cost effective 4G services. Until the end of last year, mobile subscribers were not interested to adopt 3G services due to high 3G tariffs. But, when mobile operators slashed 3G tariffs this year, we can easily see a significant surge in 3G uptake.

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In 2013, 4G TD-LTE subscribers are expected to reach 5 million in India. In Q1 of the fiscal 2012-13, Airtel recorded 37,13,000 3G subscribers, up from 27,11,000 in Q4 of the fiscal 2011-12. However, its 3,180 TD-LTE subscribers is also considered more than the expectations.

Indian market is more likely to reach at prestigious level after 2 years when the market will have considerable numbers of LTE smartphone. If we consider the price of the available 4G compatible handsets in the country, then we find they are very expensive. It’s true that India has poor smartphone penetration and market is predominated by low-priced feature phones. We might expect more numbers of LTE smartphones next year by variant OEMs such as Samsung, Nokia and Apple.

Last month, Bharti Airtel reported a decline in its average revenue per user (ARPU) and data services in India by 3% and 10% respectively, in Q1 of the fiscal 2012-13. However, the company’s subscriber baseline is continuously increasing, but it’s profit margin has been declining since last nine quarters.

As number of smartphone is increasing, mobile data consumption is also mounting up with the same pace. 4G is lucrative for those users who are starve for heavy data streaming through their mobile devices. It’s also expected that 4G could bring additional non-voice revenues to operators. Moreover, non-voice revenue in India grew up to 16% in Q1 of the fiscal 2012-13 from 15.6% in the same quarter of the previous fiscal.

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