Airtel's 4G price cut unlikely to boost adoption much

Bharti Airtel's decision to slash the rates of its 4G services by some 30 percent will not solve the fundamental issues that limit the growth of India's high-speed mobile broadband market.

Forrester mobile analyst Katyayan Gupta told ZDNet that India's biggest telco was forced to lower tariffs because adoption of its 4G services was "modest at best."

The operator which was the first to rollout 4G in India last year, announced earlier this week that its new plans, available in Bangalore, Kolkata, Pune and Chandigarh, would start at US$7.50 (450 rupees) for 2 GB bandwidth, and US$12.50 (650 rupees) for 4 GB. The company said this was comparable to 3G rates, Times of India reported that this represented a 31 percent price drop.

Gupta said the discount will lower the barrier to entry but there was still not sufficient demand for consumers to upgrade from 2G and 3G services.

"This might encourage some consumers to move to 4G but I don't see bulk of the existing consumers going straight to 4G. The entire [value added services] and content ecosystem in India needs to develop if use of high-speed data services is to increase," Gupta said.