“The Company has initiated migration of its customers in Gujarat circle to an all 4G network, prior to expiry of 2G spectrum in that circle end September 2017,” it said.
Essentially, this means that it will stop supporting 2G GSM users after the end of this month, and those who want to continue on its services need to move to a 4G device.
The Anil Ambani-led company has a pan-India 4G LTE network that it has set up with the help of Reliance Jio, headed by Anil Ambani’s brother Mukesh.
Unlike other markets like Mumbai and Delhi, RCom does not have any 3G spectrum in Gujarat, which could have supported some of the users after the 2G network is shut down.
This will be the second network that the company will be shutting down in Gujarat. About a year ago, it shut down its CDMA network in the state as part of a pan-India move.
RCom does not seem to have gone with the option of keeping its 2G subscribers by tying up with a rival 2G operator and offering roaming services, perhaps because the legality of such intra-circle roaming agreements have been challenged by the government when one of the parties does not hold any spectrum in the relevant band.
The loss of revenue has pushed the company into mounting losses.
The Anil Ambani company reported net loss to 12.21 bln rupees in the three months ended June this year, compared to net loss of 9.66 bln in January-March, as it continued to reel from the launch of Reliance Jio’s 4G services.
CDMA operators like RCom, MTS and Tata Teleservices have plunged into losses with the lauch of 4G services in India as they used to generate a substantial chunk of their revenue from high-speed data services using EVDO technology.
However, with the help of 4G services, rivals have now been able to provide data services at lower costs, and have been able to bring down tariffs drastically.
Against a tariff of around Rs 80-120 per GB charged by EVDO operators, current 4G tariffs in India are in the range of Rs 5-15 per GB.
The shut-down of the CDMA network as part of a spectrum sale and sharing pact with Jio further hit RCom’s revenue as it used to contribute the majority of the company’s voice revenue.