Spectrum Auction Might Help Airtel And Vi Attract 2G Users To 4G Network

Reliance Jio, the biggest buyer in the latest spectrum auction spent Rs. 57,100 crores, whereas Airtel and Vodafone-Idea spent Rs. 18,699 crores and Rs. 1,993.40 crores respectively, for buying spectrum in only five circles. Notably, the DoT gets Rs. 77,800 crores from three telecom operators. In fact, both Airtel and Reliance Jio bought spectrum in 800 MHz and 900 MHz band, which is also suitable for the 5G network.

2G And 3G Users Might Shift To 4G Network

Both Airtel and Vodafone-Idea offer 2G and 3G services in the country, so the latest spectrum auction might help telecom operators to migrate users towards to 4G network. Besides, spectrum auction is likely to help telecom operators to reduce the cost of their operations as they have to maintain only one network, instead of investing in 2G or 3G.

However, to attract users towards their 4G network, both Airtel and Vi have to offer affordable tariff plans, including other benefits like Reliance Jio. This might help both telecom operators to increase average revenue per user as 4G services are expensive than 2G, but this might increase the phone bills of 2G users.
According to Fitch Ratings, 4G penetration in the country is only 50 to 55 percent, which means telecom operators have enough room to attract their 2G and 3G users and this might boost their revenue along with ARPU.

Similarly, the Edelweiss Research report said that this spectrum auction is likely to help both telecom operators to improve their network quality and increase capacity. The report states that this might help Reliance Jio to gain subscriber share as Airtel added more users in recent quarters.

The firm added that both Reliance Jio and Airtel are already leading the market; however, quality of services is the major differentiator, which means Airtel has the upper hand. "We believe Bharti has made adequate investments in the spectrum as well as network; hence it is likely to continue to gain market share in the smartphone segment," the report said.

Reliance Jio And Bharti Airtel 5G Services

Reliance Jio and Airtel are likely to take lead on the 5G network as Vi is in a bad financial condition and looking for ways to increase its revenues. Furthermore, Reliance Jio and Airtel are waiting for the Government approvals to test the 5G network as both have airwaves in 800 MHz and 900 MHz bands.