Telenor promises lowest price for 4G services to combat entry of Reliance Jio

With a price war in 4G services looming, the Indian mobile arm of the Norway-based Telenor on Wednesday sharpened its pitch, saying it will offer lowest tariff in high-speed mobile segment in line with its brand positioning of 'sabse sasta' (most affordable).

"Telenor India is a mass market operator. We are committed to providing most affordable services. We will continue to maintain our sabse sasta position. Now, customers have evolved and now they would like to experience digital. That's why it is important for us to venture into narrow-band LTE (4G)," Telenor India Communications CEO Sharad Mehrotra told PTI after launching pilot 4G service here.

Telenor already offers narrow-band 4G service in Varanasi where the company, Mehrotra said, is offering an average download speed of 2 megabit per second.

The company is offering 1GB of 4G data for Rs 149 and 2GB for Rs 249, about half the price of others. But the catch is Telenor competitors promise full-fledged 4G service, with a higher speed.

Mehrotra saw competition with existing players on the cost front and entry of Reliance Jio as major challenges.

"When we entered the Indian market, we started as the 12th or 13th operator in the country. Even then, there were big and established players. Today, we are number 4 in terms of customer and revenue market share in 6 circles where we operate. This talks about acceptability of Telenor in India."

He added that Telenor's cost of providing services is about 25-30% less than others and the company will maintain it.

While Telenor uses 1.4 Mhz of spectrum to offer 4G in Varanasi, it will test the service in Vizag by using 3 Mhz of spectrum.

"We want to see the output when customers load get attached to our network. Once we are able to ascertain the service status here, we will start planning expansion of 4G service further," Mehrotra said.

Telenor intends to roll out 4G services in 6-8 cities across its all operational circles in the next 45-60 days. The company has operations in Andhra Pradesh, Uttar Pradesh East and West, Bihar, Gujarat and Maharashtra and had 51.6 million customers on its network in February.

Telenor has limited spectrum vis-a-vis its competitors.

Mehrotra made it clear that there are no capacity constraints for the company as of now, which is keen to acquire more spectrum either through the auction or M&A route.

"We are very keen on buying spectrum. That's why we have been requesting the government to keep spectrum price at an affordable level. Trai's suggested price for 700 Mhz is at a higher level. We also favour Trai's suggestion on payment methodology as it would encourage operators to expand services for mass market at affordable rates," Mehrotra said.

The regulator has recommended Rs 11,485 crore per Mhz for spectrum in 700 Mhz band, the highest ever for any radiowave.

Telenor expects its entire existing network to be 4G ready by mid-2017, but will expand 4G services gradually.