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Despite 4G splash, Airtel puts $1 billion more into 3G

4G coverage still patchy, 4G devices scarce, and all of Airtel's voice operations are done via 3G

Bharti Airtel is putting in $1 billion (Rs 64 billion) in 2015-16 to grow its 3G coverage, expanding the 3G network in new and existing circles and deploying its new spectrum purchased in March.

Airtel will aggressively roll out 3G networks over the first six months and "would look at upfronting this capex in the first half " itself, Gopal Vittal, managing director & CEO for India & South Asia, said during the fourth-quarter earnings call.

The proportion of its 3G sites increased to 33.3% of the total in the quarter ended March 2015, from 22.6% a year earlier, brokerage UBS wrote in a recent report.

Airtel's 3G drive comes as widespread adoption of 4G is still some time away. Industry experts believe a key reason is that 4G coverage is likely to be patchy over the next six months or more and confined to limited areas.

Moreover, with the 4G technology for voice - VOLTE - still some time away, Airtel has depended on fallback to 3G to implement voice calls initiated through its 4G network.

In its report, UBS said Airtel's 4G rollout could play second fiddle to 3G in absence of compatible devices. "We believe 3G will meet the mass market's data needs in India, given the wide gap between the 3G and 4G ecosystems," UBS said.

Prevailing technology will be 3G, felt Sandeep Girotra, India head of telecom gear maker Nokia Networks. "There will be a sprinkling of 4G but only selectively among incumbents for
about a year," he said.

Based on Economic Times story

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