As Reliance Jio gears up for better network coverage with massive investments, it has — in all certainety — has built extensive pressure on other major telecom companies in the country. To push away the surrounding load, Bharti Airtel Ltd has revealed its plans to switch to VoLTE (Voice over Long-Term Evolution) in its prominent markets by the mid-2018. The technology is currently offered by Jio on an unlimited basis to its customers. It is only possible as the entire network spectrum for the company is built over 4G.
VoLTE technology is a standard for high-speed wireless communication for mobile phones and data terminals. In simple terms, with the use of VoLTE, telecom companies can offer up to three times more voice and data capacity than 3G UMTS and up to six times more than 2G GSM. As Airtel expands its 4G reach to its present 22 circles, it is quite possible that the said step will be taken in near future. Presently, the telecom giant delivers voice on 2G network to its customers using the circuit switch technology.
Shedding light on the future endeavors for Airtel, Gopal Vittal, chief executive for the company said,
“VoLTE will be very relevant in key markets/big cities in next 12-18 months and even as sub-GHz band is best in deploying voice, 1,800 Mhz band is also very good. We are future-proofing our network for VoLTE and looking at deploying equipment switch in key markets.”
Previously, in a move to rout Jio, Airtel announced its new scheme offering free 4G data worth Rs. 9,000 for 12 months to users who switch to Airtel 4G. The scheme commenced on 4th of January and will close on February 28, 2017. The action was taken in response to extension of Jio’s Happy new offer until March 2017. Though the VoLTE technology is just trending, it is moving at a great pace beating the 2G switch technology in western countries.
One of the significant advantages, Airtel holds over Jio is its better 2G/3G network coverage along with loyal customers spread all across the country. Hence, swapping over VoLTE will be a left hand’s move for the telecom operator. The present stats for the company reveal that the minutes on the network increased by over 5% in terms of voice calls but the voice ARPU (average revenue per user) went down to Rs123 in the last quarter from Rs132 a year ago. Moreover, the net profits for the company fell by 54% in the third quarter with the entry for Reliance Jio Infocomm in the market.
Stating the reasons for decline, Vittal said,
“This is majorly due to the asymmetric traffic from a new operator and free voice services available. The burden of calls is high and below the cost of production, thereby impacting ARPUs.”
Besides the decline in the voice department, average revenue per user also fell in the data usage sector. The realization per MB and APRU slumped by 10.5% and 13%, respectively. The company reasons out Jio’s free services for the drop as many of Airtel’s customers have adopted Jio as an additional alternative. The company feels that once the season of free service concludes, the customers will return back witnessing the network offered by Airtel. Along with switching to VoLTE, Airtel is also engaged in designing better plans for its customers at a lower price.Vittal further added,
“Lower pricing should not be a concern since cost of producing a MB is falling as network investment is happening. It’s an ARPU game and a function of how demand (of data) shapes up.”
