Airtel to invest Rs 6,400 crore to expand 3G services

To expand pan-India 3G network, Bharti Airtel will invest $1 billion (Rs 6,400 crore) in this financial year. This move will spread its network in new as well as existing circles and will also deploy data spectrum.

"Airtel will roll out 3G networks aggressively over the first six months (of this financial year) as it has acquired additional 3G airwaves in many circles to plug coverage gaps," a person familiar with the matter told the Economic Times.

Sunil Bharti Mittal-led Bharti Airtel will take a decision over investing more funds to expand 3G network by September end after getting a fix on whether revenue growth has met the target, said a second person.

"We have no comments and as a policy do not give service-specific capex details," a spokesman said in an e-mailed response to ET's queries on 3G-related investment.

India's No. 1 mobile carrier will 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, had said earlier.

Meanwhile, the proportion of its 3G sites increased to 33.3% of the total in the quarter ended March 2015, from 22.6% compared to last year, 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 creation of a robust, pan-India fallback data services option since 4G coverage is likely to be patchy over the next six months or more and confined.

UBS said in its report that 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.

(Image: Reuters)