Existing 2G customers don’t want to switch to smartphones because of the high prices of devices and the preference for feature phones, executives said. For users from the lowest economic strata, the tariffs would be high even though they are among the lowest in the world in India.

“There are about 150-200 million existing 2G customers, of which about 50-100 million may be nudged to move to 4G, but there will be a large customer base that will not move to 4G, and that’s not just on our network but also on any other network,” said a senior executive at Reliance Jio, India’s largest telecom service provider that has been committed to making India 2G-free. ₹1,000 JioBharat phones to first attract such users and then move them up to 4G.

“There are customers who cannot move to ₹1,000 units, because for them it is unaffordable,” the executive said, asking not to be named. “Unless the telcos themselves decide to switch off 2G or the government mandates, 2G networks in India will continue to continue.”

Although Reliance Jio does not have 2G customers on its network as it only provides 4G and 5G services, it has pitched using ₹75,000 crore Universal Services Obligation Fund – created to ensure connectivity reaches all under-connected areas in India – by subsidizing smartphones for feature phone users.

Vodafone Idea, which has about 86 million 2G users making up 40% of its user base, said it will push its customers to move to 4G but will not abandon them or let them be poached by competition. Vi’s Chief Marketing Officer Avneesh Khosla told Mint that tariff hikes had been accepted by consumers but high prices of entry-level 4G smartphones, which have risen significantly in recent years, continued to pose a challenge.

“Even OEMs (original equipment manufacturers) have started to leave that price point, because everyone wants to move up the value chain. There will be a percentage of customers who will continue to be on 2G devices, and we will continue to convince them , but if they want to be served with a 2G device and a 2G network, will we walk away from that? The answer is no,” says Khosla.

We will shut down its 3G services in March next year, making it the last operator to shut down 3G services and has only 2G, 4G and 5G networks in the country.

Bharti Airtel, India’s second largest operator which has around 90 million 2G customers, has also said that it will not shut down its 2G network as it continues to serve customers at the lower end and does not need to spend on this as it does not require additional spectrum.

2G customers are typically low average revenue per user users who do not have access to the high-speed internet that 4G or 5G offers.

“Lack of affordable entry-level smartphones, higher costs associated with 4G plans and limited 4G network coverage in remote areas are key reasons why 2G users are not migrating to 4G,” said Shilpi Jain, senior analyst at Counterpoint Research. India still has a significant feature phone user base for 2G networks and a section of users keep feature phones as their secondary device, she said.

Many retirees prefer a simple feature phone over a smartphone that ensures continuity on 2G networks in India. Also, because there is still a significant gap between the price of feature phones and entry-level smartphones, the migration has slowed in recent years, she said. The price of entry-level 4G devices starts from ₹6,000, while 5G phones start from ₹9,500 and onwards.

However, Faizal Kawoosa, founder of research firm TechArc, expects 2G users to ditch privately owned networks entirely if tariff hikes continue.

“With telcos consistently working to improve ARPU, mainly by raising tariffs, they eventually want to phase out this level of high-volume, low-value subscribers. Perhaps that’s why they’re working on a plan to let such subscribers go and make the money from the payment base and gradually continue to raise tariffs to compensate, says Kawoosa. 2G network where all such subscribers will hook up.”

BSNL has been adding customers at the expense of competitors. In August, BSNL gained 2.5 million consumers, taking the total to 91 million, according to data released by the Telecom Regulatory Authority of India on Friday. In contrast, Jio lost 4 million, while 2.4 million dropped Airtel and 1.8 million subscribers left Vi.