With Reliance Jio finding success with its 4G VoLTE network and low-cost plans, market leader Airtel is joining the bandwagon. The biggest telecom operator in the country has announced it will roll out its own VoLTE service across the country by March 2018. Airtel India MD and CEO Gopal Vittal said the company has done VoLTE trials in 5-6 cities already. With this move, Airtel will become the second VoLTE-capable network in the country after Reliance Jio, which started its 4G VoLTE-only services last year.
"We have done (VoLTE) trials in 5-6 cities. Towards the end of this fiscal year, we will be taking VoLTE everywhere. The uptake of VoLTE devices will depend on certification...We should be very much national in the coming 6-9 months," Vittal said during earnings call.
At present, Mukesh Ambani controlled Reliance Jio is the only operator in India offering voice on 4G network using VoLTE technology, while the incumbent telcos have been offering voice calls to their 4G customers with support of their other established networks - 2G and 3G.
Vittal said that 3G networks in India will be phased out faster than other parts of the world and "India will get to a situation where 4G and 2G will co-exist for a while."
Bharti Airtel on Tueday reported its smallest profit in 18 quarters as the price war triggered by newcomer Reliance Jio led to a massive 75 percent fall in its April-June earnings.
The net profit for the first quarter of 2017-18, at Rs. 367 crores, was 74.9 percent lower than the year-ago period, and the company blamed the disruptive pricing of the new entrant for continued "turbulence" and stress in the market.
The net income for the Sunil Mittal company stood at Rs. 1,462 crores in the first quarter of 2016-17.
To questions on Airtel's strategy to counter the new 4G feature phone announced by Jio, Vittal said Airtel will not be taking a similar route.
"One of the things that we have stayed away and have no intention to get into is subsidising device, managing device inventories and running these devices as they belong to us," he said.
Reliance Jio has announced that it will launch a 4G feature phone against one-time refundable deposit of Rs. 1,500 a unit. It will come pre-loaded with applications with the option of unlimited data usage and free calling service starting at Rs. 24.
Vittal said that Jio's feature phone will open up new segment for 4G services.
"We believe that this could propel the launch of cheaper phones in the market and that is something that we embrace. We will work with all the device companies to encourage this. We will continue to look at opportunity where we can bundle," he said while raising uncertainty over pick up of JioPhone.
Vittal said that the price of the feature phone is on the higher side than what is being sold in the market.
"60-65 percent feature phones are sold below Rs. 1,000 in India. This is higher end of that. We need to understand what the terms and conditions are and how customers respond. We will respond at the right point of time," he said.
Vittal said that aggressive plans of Jio may lead to further consolidation which will benefit Airtel.
He, however, said that company will respond with competitive strategy to increase its market share. "You have seen action in the market already. We have lost ARPU over last few quarters, we have seen revenue erosion. This is simply because we have responded in the marketplace with aggressive pricing in order to compete and grow our market share. That aspect will continue," Vittal said.
The total customer base of Airtel in India increased by 9.7 percent to over 28 crore but its average revenue per user (ARPU) declined by 21.1 percent to Rs. 154 from Rs. 196 on YoY basis.
"The reason that is important is as you come out of this war that is currently on, we believe that this market will consolidate behind three players plus the government player, may be four, but perhaps three. We believe our objective is to consolidate and grow our market share," Vittal said.