Airtel to roll out VoLTE service to counter Reliance Jio

Telecom major Bharti Airtel is in the process of rolling out Voice over Long-Term Evolution (VoLTE) technology that enables phone calls using 4G technology across India, and plans to complete it by the end of the current financial year, a top official of the company said.

"We have done (VoLTE) trials in 5-6 cities. Towards the end of this fiscal year, we will be taking VoLTE everywhere. The uptake of VoLTE devices will depend on certification...We should be very much national in the coming 6-9 months," Gopal Vittal, MD and CEO (India and South Asia), Bharti Airtel said during earnings call.

Voice over Long-Term Evolution (VoLTE) is a standard for high-speed wireless communication for mobile phones and data terminals. It is based on the IP Multimedia Subsystem (IMS) network, with specific profiles for control and media plans of voice service on LTE. This approach results in the voice service (control and media planes) being delivered as data flows within the LTE data bearer.

This means that there is no dependency on (or ultimately, requirement for) the legacy circuit-switched voice network to be maintained. VoLTE has up to three times more voice and data capacity than 3G UMTS and up to six times more than 2G GSM. Furthermore, it frees up bandwidth because VoLTE's packets headers are smaller than those of unoptimised VoIP/LTE.

At present, Mukesh Ambani controlled Reliance Jio is the only operator in India offering voice on 4G network using VoLTE technology. All incumbent telcos have been offering voice calls to their 4G customers with support of their other established networks - 2G and 3G.

According to Vittal, 3G networks in India will be phased out faster than other parts of the world and "India will get to a situation where 4G and 2G will co-exist for a while."

Bharti Airtel on Tuesday reported its lowest profit in 18 quarters as competition from newcomer Reliance Jio led to a massive 75 per cent fall in its April-June earnings.

Net profit for the first quarter of 2017-18, at Rs 367 crore, was 74.9 per cent lower than the Rs1,462 crore reported in the year-ago quarter.

Vittal, however, ruled out subsidising mobile devices to push voice and data sales as a counter to Jio's announcement of new low-cost 4G feature phones.

"One of the things that we have stayed away and have no intention to get into is subsidising device, managing device inventories and running these devices as they belong to us," he said.

Reliance Jio has announced that it will launch a 4G feature phone against one-time refundable deposit of Rs1,500 a unit. It will come pre-loaded with applications with the option of unlimited data usage and free calling service starting at Rs24.

Vittal said that Jio's feature phone will open up new segment for 4G services.

"We believe that this could propel the launch of cheaper phones in the market and that is something that we embrace. We will work with all the device companies to encourage this. We will continue to look at opportunity where we can bundle," he said while raising uncertainty over pick up of JioPhone.

Vittal said that the price of the feature phone is on the higher side than what is being sold in the market.

"60-65 per cent feature phones are sold below Rs1,000 in India. This is higher end of that. We need to understand what the terms and conditions are and how customers respond. We will respond at the right point of time," he said.

Vittal said that aggressive plans of Jio may lead to further consolidation which will benefit Airtel.

He, however, said that company will respond with competitive strategy to increase its market share.

"You have seen action in the market already. We have lost ARPU over last few quarters, we have seen revenue erosion. This is simply because we have responded in the marketplace with aggressive pricing in order to compete and grow our market share. That aspect will continue," Vittal said.

The total customer base of Airtel in India increased by 9.7 per cent to over 280 million but its average revenue per user (ARPU) declined by 21.1 per cent to Rs154 from Rs196 year-on-year.