Telecom companies in India have been caught by surprise by the increase in voice calls made by their subscribers in recent months, telecom secretary Aruna Sundararajan said on Tuesday after attending a meeting with industry officials.
“They have been surprised by the two-times growth of voice traffic (since unlimited plans were introduced),” Sundararajan said after chairing a meeting on call drop.
She said that telecom companies were ready for the 500-600% growth in mobile data consumption, but the growth in voice consumption was above their estimations.
According to quarterly numbers disclosed by Bharti Airtel, the total number of voice minutes on its network jumped 45% in October-December of 2017 compared to the same three months of 2016. For Idea Cellular, the growth was 35%.
For Bharti, the average voice usage per subscriber has increased to 575 per month from 419 minutes a year ago. For Idea, it has increased to 509 minutes per month from 385 minutes a year ago.
The increase — which creates a heavier burden on 2G networks compared to 3G and 4G — is a worrisome trend for these companies as they are not keen to invest in and expand networks based on old technologies like 2G.
In fact, the number of cell sites operated by Idea Cellular on 2G have shown a declining trend as the company has been shutting down towers that do not generate enough revenue to justify their operating costs.
Moreover, given that the carrying capacity of 2G is far less than that of 4G for the same amount of spectrum and towers, there have also been calls for shutting these networks down and reallocating the towers and spectrum to 4G for more efficient use.
If 2G and 3G are shut down, it would save thousands of crores of rupees every year in terms of network operating costs for these companies.
The problem, however, is Jio.
Most of the current 2G subscribers of these companies do not own phones that support 4G voice.
If 2G is shut down to save network costs, these subscribers will be forced to spend at least Rs 1,500 each to buy a new 4G voice-enabled phone like Jiophone.
However, the Jiophone works only on Reliance Jio’s network. A phone that works on all networks costs at least 50% more than the Jiophone.
As such, a forced migration to 4G will give a pricing advantage to Reliance Jio.
Besides this, there is also the fact that 4G voice is not available on incumbents’ networks widely.
Airtel, which has been on the forefront, has introduced 4G voice services in many areas, and is likely to make it available in nearly all of its coverage areas by the end of the year.
However, Idea Cellular is yet to launch the service and last week said it will introduce 4G voice services towards the end of 2018 financial year 2018 (March 2018).
However, to really migrate their customers from 2G to 4G would require these companies to come up with their own versions of the Jiophone, something that they are loath to do due to the expense involved in procurement and distribution of devices.
On the positive side, the price of an ‘open market’ 4G voice phone is likely to dip below the Rs 2,000 mark by the end of this year.