KOLKATA: India's top telecom company ****** Airtel is likely to ask China's Huawei to handle 4G network rollouts in the country's biggest data markets of Delhi and Mumbai, which were among the four regions where it acquired US chipmaker Qualcomm's wireless broadband permits last year, executives aware of the matter said.
Huawei may initially supply 6,000-odd base stations (BTSs) for the first wave of Airtel's high-speed wireless data services rollouts in Delhi and Mumbai. At current prices of roughly $25,000 or Rs 13.5 lakh per base station, the initial cost of rolling out 4G networks in both metros would be $150 million (Rs 810 crore approximately ). The final deal size could run in excess of $200 million (Rs 1,100 crore approximately) if Huawei is also asked to manage these networks.
This will be Airtel's first 4G network deal announcement after Gopal Vittal took charge as chief executive. ****** was the first Indian telco to launch fourth-generation services about a year ago and it had announced plans to widen its 4G footprint to 8 telecom zones after it acquired 49% in Qualcomm's wireless broadband entities in Delhi, Mumbai, Haryana and Kerala for Rs 924 crore. It had earlier shelled out Rs 3,314.36 crore for wireless broadband airwaves in Kolkata, Karnataka , Punjab and Maharashtra.
****** Airtel did not reply to ET's specific queries on whether it is buying gear from Huawei for expanding its 4G footprint to the country's biggest telecom zones. The Chinese vendor also did not respond to ET's email query on deal size and tenure. A top executive close to the talks, however, said ****** and Huawei were broadening their 4G engagement.
Huawei has supplied 4G networks and devices like dongles and customer premise equipment (CPE) to Airtel in Bangalore, and is likely to do the same in Delhi and Mumbai. Both companies have conducted trails of Huawei's Ascend P1 LTE smartphone, which is the first TD-LTE compatible 4G handset in India, although Airtel did not comment on whether it had finalised its pricing.
"Airtel has not placed purchase orders for 4G gear for potential Delhi and Mumbai rollouts as it is yet to take a call on whether it will have adequate customers to justify a fresh Rs 800 crore investment, given the poor traction of 4G in India in the absence of devices ecosystem and high data tariffs," said another executive who did not wish to be named.
Sector analysts claim investments in a greenfield rollout will be high since 4G airwaves in the 2300 MHz band offer limited coverage unlike frequencies in the 900 MHz, 1800 MHz or 700 MHz bands that more efficient and offer wider coverage.
Till date, ****** has launched 4G services only in Bangalore, Kolkata and Pune and has some 40,000-odd customers, although the company did not confirm this. There is no decision yet to immediately launch in Haryana or Kerala. "4G hasn't taken off since device and data tariffs remain high and Airtel is unlikely to see serious traction unless it launches in Delhi and Mumbai," says Ovum's principal telecoms analyst (consumer services), Shiv Putcha. Putcha expects Airtel to cherry pick launch zones as "its 4G spectrum holdings in key circles are largely strategic acquisitions, especially since India is not ready for 4G as we neither have the relevant content, the devices or the demand to drive wireless broadband services penetration" .
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Huawei may initially supply 6,000-odd base stations (BTSs) for the first wave of Airtel's high-speed wireless data services rollouts in Delhi and Mumbai. At current prices of roughly $25,000 or Rs 13.5 lakh per base station, the initial cost of rolling out 4G networks in both metros would be $150 million (Rs 810 crore approximately ). The final deal size could run in excess of $200 million (Rs 1,100 crore approximately) if Huawei is also asked to manage these networks.
This will be Airtel's first 4G network deal announcement after Gopal Vittal took charge as chief executive. ****** was the first Indian telco to launch fourth-generation services about a year ago and it had announced plans to widen its 4G footprint to 8 telecom zones after it acquired 49% in Qualcomm's wireless broadband entities in Delhi, Mumbai, Haryana and Kerala for Rs 924 crore. It had earlier shelled out Rs 3,314.36 crore for wireless broadband airwaves in Kolkata, Karnataka , Punjab and Maharashtra.
****** Airtel did not reply to ET's specific queries on whether it is buying gear from Huawei for expanding its 4G footprint to the country's biggest telecom zones. The Chinese vendor also did not respond to ET's email query on deal size and tenure. A top executive close to the talks, however, said ****** and Huawei were broadening their 4G engagement.
Huawei has supplied 4G networks and devices like dongles and customer premise equipment (CPE) to Airtel in Bangalore, and is likely to do the same in Delhi and Mumbai. Both companies have conducted trails of Huawei's Ascend P1 LTE smartphone, which is the first TD-LTE compatible 4G handset in India, although Airtel did not comment on whether it had finalised its pricing.
"Airtel has not placed purchase orders for 4G gear for potential Delhi and Mumbai rollouts as it is yet to take a call on whether it will have adequate customers to justify a fresh Rs 800 crore investment, given the poor traction of 4G in India in the absence of devices ecosystem and high data tariffs," said another executive who did not wish to be named.
Sector analysts claim investments in a greenfield rollout will be high since 4G airwaves in the 2300 MHz band offer limited coverage unlike frequencies in the 900 MHz, 1800 MHz or 700 MHz bands that more efficient and offer wider coverage.
Till date, ****** has launched 4G services only in Bangalore, Kolkata and Pune and has some 40,000-odd customers, although the company did not confirm this. There is no decision yet to immediately launch in Haryana or Kerala. "4G hasn't taken off since device and data tariffs remain high and Airtel is unlikely to see serious traction unless it launches in Delhi and Mumbai," says Ovum's principal telecoms analyst (consumer services), Shiv Putcha. Putcha expects Airtel to cherry pick launch zones as "its 4G spectrum holdings in key circles are largely strategic acquisitions, especially since India is not ready for 4G as we neither have the relevant content, the devices or the demand to drive wireless broadband services penetration" .
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