Bharti Airtel to expand 4G ahead of Reliance launch

By Aditi Shah and Aman Shah

GURGAON, India (Reuters) - India's top cellular carrier Bharti Airtel Ltd is expanding its fourth-generation (4G) mobile phone services to cover nearly 300 towns in the coming weeks, ahead of a launch by a formidable newcomer.

Mobile phone carriers in India, the world's second-biggest market by number of customers, have spent billions of dollars on buying telecom airwaves to meet surging demand for data services.

The crowded market is bracing for more competition as Reliance Jio, the telecoms unit of cash-rich conglomerate Reliance Industries Ltd , prepares to offer 4G services starting in December.

In 2012, Bharti Airtel launched a 4G network in Kolkata city and currently runs trials in 51 towns. It will cover in the coming weeks 296 towns in 14 of 22 service areas, the company's India Chief Executive Gopal Vittal said on Thursday.

 

"This is a very competitive market and it keeps us on our toes," Vittal told reporters at a news conference in Gurgaon, outside New Delhi.

Companies including Bharti Airtel and Reliance Jio won airwaves needed to run 4G services five years ago, but have been slow to roll out services due to technology problems and lack of devices.

Proliferation of cheap smartphones, led by Chinese brands, has prompted more Indians to use their handsets to access the Internet and demand faster downloads. An Internet-based startup boom in the country has also seen increased adaptability on smartphones, bolstering the demand for high-speed data.

4G services should make it much faster than 3G services to surf the web on mobile phones, tablets and laptops.

The number of mobile web users in India is expected to grow by around 28 percent annually between 2013 and 2017 and reach 314 million by the end of 2017, according to a report released by the Internet and Mobile Association of India and KPMG.

Bharti Airtel, which posted 87 percent growth in mobile data traffic in its results for the three months to June, decided to ramp up its 4G services in recent months as it saw prices of devices falling, Vittal told Reuters.

Bharti will price its 4G services at existing 3G costs and aims to migrate more and more of its Internet subscribers to 4G, it said.

The mobile carrier is partnering with India's largest online marketplace Flipkart to bundle devices with 4G-enabled SIM cards. It has also entered into a pact with Samsung Electronics <005930.KS> to sell services using the Korean company's retail store network in India.

(Editing by Susan Thomas)