17.7.14

Aircel's 4G debut


Aircel launched fourth-generation (4G) telecom services in Andhra Pradesh, Assam, Bihar and Odisha, becoming the second operator after bellwether Bharti Airtel to offer high-speed Internet in India, and increasing the value of its broadband assets that may be put up for sale.
Aircel, majority owned by Malaysia's Maxis, bought 20 MHz of spectrum in the 2300 MHz band -used for 4G services based on TDD-LTE technology -across eight circles of Andhra Pradesh, Tamil Nadu, West Bengal, Bihar, Odisha, Assam and North East and Jammu & Kashmir in a government-held auction in May 2010.
While 4G services offer download speeds that are 10 times faster than 3G, most companies have delayed their rollouts in this segment, even after holding bandwidth for over four years, because of the lack of mobile devices that support TDD-LTE technology and low customer awareness. Bharti Airtel's 4G services in some cities -mostly through dongles have not met with much success.
However, time is running out for operators holding 4G spectrum, including Reliance Industries' unit Reliance Jio Infocomm, Tikona Digital and Augere, with their rollout obligation deadline ending in 2015. Companies must start 4G operations in at least 90% of the service areas, failing which the government could withdraw the airwaves. Reliance Jio said it will launch services in 2015.
Some telcos such as Airtel, Idea Cellular, Vodafone India and Reliance Jio plan to use the 1800 MHz spectrum band to launch 4G on the FDD-LTE technology , which is more popular globally .An investment banker who asked not to be identified said Aircel's 4G launch will serve two purposes increase the value of its as sets and fulfill the rollout obligation.
A senior industry official familiar with Aircel's strategies said there are chances that its 4G offerings will be bought by Bharti Airtel after India's No. 1 carrier launches the services in Mumbai and Delhi.
Airtel bought BWA or 4G licences from Qualcomm in four circles, including the two major metro cities. On its own, Bharti has permits in four other circles, taking the total to eight. A company official had said earlier that Airtel will try and match Reliance Jio, the only player to have bid and won high-speed Internet airwaves in all 22 service areas.
Aircel has debt of more than Rs.24,000 crore, primarily due to a payout of almost Rs.10,000 crore for 3G and 4G spectrum in the 2010 auctions and expenses on expanding operations in 2G and 3G over the years. Intense competition and high interest costs have eroded the company's net worth as well.

No comments: