Top mobile operators prepare for data war

India's top three mobile operators - Bharti Airtel, Vodafone India and Idea Cellular - have strengthened their positions in the battle for data by acquiring incremental spectrum. These companies don't only plan to become pan-India 3G operators on their own, but also establish substantial presence in the fourth-generation (4G) long-term evolution (LTE) space to take on the Mukesh Ambani-controlled Reliance Jio Infocomm, expected to launch services by June-July.

With incumbents now straddling the 2G, 3G and 4G LTE space, which will allow customers to seamlessly switch between bands on their devices, the battle for data will hot up, as Reliance Jio does not have spectrum for 3G services.

As of now, Bharti Airtel is the only company to offer 4G commercial services in India. "The company will now be able to offer pan-India 4G services using a combination of FD-LTE technology in the 1,800-MHz band and TD-LTE roll-out in the 2,300-MHz band," Bharti said in a statement. In the recent auction, the company acquired 1,800-MHz spectrum across Punjab, Andhra Pradesh, Kolkata, Odisha, Haryana and the Northeast.

Globally, 1,800-MHz is already a proven band for 4G services to provide high-speed data. So far, this spectrum has been used to offer only 2G voice services in India but with the government liberalising spectrum, it might be popular for 4G LTE services, too.

The 800-MHz band is also used to offer 4G LTE services in many countries. Globally, the 900-MHz and 2,100-MHz bands are popular options for 3G services.

"Though Bharti's spectrum payment is the second-highest among bidders, of its total spend, only 60 per cent is for renewals; 40 per cent is for expansionary spectrum. The firm secured assets that were strategically important to its competitive position and data growth strategy, particularly in the 900-MHz band, which we view positively,"said Annalisa Di Chiara, vice-president and senior analyst, Moody's.

Bharti has not only retained spectrum in all the six 900-MHz circles, it has bought 8-10 MHz in four circles so that part of it can be used to offer 3G services. The company has also bought 2,100-MHz in various circles.

Idea Cellular, which has been able to retain spectrum in the 900-MHz band, is pushing for 4G LTE, acquiring additional spectrum in the 1,800-MHz band in six key service areas in the recent auction. "This will enable Idea to roll out 4G on 1,800-MHz in 10 areas, covering 61 per cent of Idea's gross revenue," said a statement by the Aditya Birla Group firm. It has also extended its presence in 3G services from 11 to 13 circles.

Vodafone is pursuing 4G services, through 1,800-MHz band. It has bought 1,800-MHz spectrum in Gujarat, Kerala and Uttar Pradesh (East). Last year, it bought additional spectrum in the 1,800-MHz band in Mumbai, Delhi, Kolkata, Karnataka, Kerala, Gujarat, UP (East), Rajasthan, Haryana, Andhra Pradesh and Punjab. After the 2014 auction, Vodafone had said it would launch 4G in the 1,800-MHz band in Mumbai, Delhi, Kolkata, Karnataka and Kerala.

It has also strengthened its 3G services by acquiring spectrum in the 2,100-band, extending 3G operations in 16 circles, against the current nine.

With Reliance Jio facing tough competition from incumbent operators on the data front, the company has concentrated on ensuring it has enough spectrum in the 800-MHz and 1,800-MHz across circles, which will supplement its 2,300-MHz pan-India spectrum, to offer 4G LTE data. In the current auction, it has bought five MHz spectrum (the least required for data) in the 800-MHz band across 10 circles. It has extended its spectrum holding in the 1,800-MHz band to cover all but three of the 22 circles. Part of this spectrum will be used for voice, too.

In a statement, Reliance Jio said in addition to its pan-India 2,300-MHz spectrum, it has spectrum in either the 800-MHz or 1,800-MHz band or both, in 20 of 22 circles. "This combined spectrum footprint across frequency bands provides significant network capacity and deep coverage," the statement said.

The Anil Ambani-led Reliance Communications has said it plans to offer 4G services. "RCom becomes India's first and only operator with a nationwide footprint of contiguous 800/850-MHz spectrum. RCom operations are now future-proofed across all circles for LTE, at optimal costs," the company said.