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Bharti Airtel will be the First Company in India to shut down 3G network by March 2020; as it prepares for 5G

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India’s Telecom Giant Bharti Airtel recently made an official announcement in a press release that it has started preparing to shut down its entire 3G network across India by March 2020, as the process for which has already started with Kolkata service area.

The company said it is betting big on next generation technologies as now main goal is on driving greater realization and Average Revenue Per User (ARPU) but focussed that tariffs need to move up in long term for industry viability.

The process of winding up the 3G network has already been initiated with Kolkata in the recent-concluded June quarter.

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By September, 2019 the shut down will be affected in 6-7 more circles and between December of this year and March 2020 the entire 3G network would be shut down, Gopal Vittal, CEO (India and South Asia), Bharti Airtel, said during the company’s post earnings call.

“Yes, we do see an upgrade when someone moves from 2G to 4G…On spectrum, probably by April 2020, we will really have only 2G and 4G. So all our spectrum will sit on 4G other than the administered spectrum which is on 2G, plus a small slug of spectrum that we require to run our 2G networks…everything else will be sitting on 4G band,” Vittal said.

Bharti Airtel had managed to add 8.4 million 4G customers and has 120 million data customers of which about 95 million are on 4G. Data usage by Bharti’s subscribers has now reached over 11 GB/month.

Airtel had said Thursday that in line with its focus on network experience, it has re-farmed spectrum from 3G networks to 4G across both the 900 as well as 2100 bands and begun the process of shutting down 3G networks in India. This has enabled the company to deliver improved indoor coverage as well as enhance capacities, it had said.

Badal Bagri, Chief Financial Officer of the company, said that the broader industry which has consolidated to three large players continues to see “some semblance of stability”.

“While we have witnessed revenue growth despite any outright tariff increase, we continue to believe that prices needs to move up in the long term to ensure industry viability,” Bagri said.

Airtel said that in coming times they are not expecting the prices to go up and in fact it is prepared for it not to move up despite remaining at extremely low or at “unsustainable” level.

To another query on asset monetisation plans for its fibre infrastructure, the company said it continues to evaluate opportunities that come up.

“We had moved all our fibre assets to 100 percent subsidiary and we have all approvals in place right now…that is going to be effected in this current quarter. On monetization, we will continue to evaluate opportunities and at right time we may choose to see what should be the potential structure,” Bagri said.

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Bharti Airtel on August 1, 2019 reported a massive loss of Rs 2,866 crore loss for the June quarter, its first consolidated loss in 14 years, as the telco made all the efforts to rival Reliance Jio and took a hit from exceptional items such as charges towards accelerated depreciation of 3G network gear.

Airtel had posted a net profit of Rs 97 crore in the June quarter of the previous fiscal. The revenue of the Sunil Mittal-led company climbed upwatds to 4.7 per cent to Rs 20,738 crore during the first quarter ended June 2019.

In its latest report on Bharti Airtel’s Q1 results, Jefferies said that price hikes in India’s mobile business is unlikely in fiscal 2020 and may happen only after Jio becomes the dominant player.

“We believe that price hikes in India’s mobile business are unlikely in FY20 and will happen only after Jio becomes the dominant player with 40 percent plus market share, which we expect in FY21,” Jefferies said in its note.

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