Bharti Airtel to start refarming 2G spectrum for 4G this year

India’s largest telecom services company by revenue and spectrum holding, Bharti Airtel, will start diverting its 2G spectrum to add to its 4G network in the second half of the ongoing financial year, the company’s CEO said.

The move will help increase 4G capacity of the operator by adding a carrier (5 MHz block) of spectrum to the 4G network.

2G services are run on 900 MHz and 1800 MHz spectrum. Out of this, 1800 MHz can be readily deployed for 4G services, but 900 MHz will take another couple of years to be ready for 4G services as most handsets do not support the band.

Bharti Airtel has 1800 MHz spectrum in nearly all the 22 telecom circles and 900 MHz in 15 circles.

At present, Bharti Airtel is operating 2G services using only 1800 MHz spectrum in eight circles, while in the remaining 14 circles, it is using 900 MHz or a combination of both.

It is estimated that around 50% of the total users on Bharti Airtel’s network are using 2G-only devices.

However, the percentage of 2G-only phones on the network would be lower in urban areas — where customers are more economically well-off, compared to rural areas.

As such, Bharti said it will begin the refarming of 1800 MHz from urban centers first — confining it to certain areas and cities.

“In one or two cities, towards the back half of this year, we may look refarming some of the spectrum to 4G,” Gopal Vittal, CEO of Bharti Airtel, said.

He said refarming will gather pace in the next financial year, which starts in April 2018.

“As we look at FY18-19, we are certainly going to refarm a bunch of spectrum in quite a few cities,” he said.

It is likely that Vittal was talking about Mumbai and Delhi as the first two cities where the refarming will take place.

“An important metric that we look at is what is the amount of voice traffic being carried by 2G devices on the 2G network,” said Vittal.

“If that number..falls beyond a threshold that we’ve identified, then we will immediately look at refarming. My estimate is that that number will be breached towards the back half of the year.”

The company has been quite aggressive in re-allocating spectrum from older technologies — which generate less revenue — to more lucrative newer technologies.

Last year, it said it was shifting 2G users in circles like Karnataka and Andhra Pradesh from its 900 MHz spectrum to divert part of it to 3G services.

The company is engaged in a 4G price war with new telecom operator Reliance Jio, and needs all the extra data capacity it can get to remain profitable. It said its data prices fell 32% in the three months from January to March this year due to competition with Jio.