I had the same problem in the factory 4 weeks back. The engineer came and changed the modem and went back. Everything is fine now.
I'm having the same problem at my home since a week. The engineer landed up once a refused to believe that the problem lies with the modem. He checked the line and cleaned it and said that it should work fine now. I told him that it won't solve the problem, and as expected, the same problem is still there. I also got to know of this new Airtel policy from him where after one year warranty, the modem needs to be taken to the service center by the customer. I took the number of the service center and it seems that if the modem can be repaired without any part replacements, it costs Rs. 150 for a wired modem. Also, they need one day to do it.
Now, given the failure rate of these modems, it seems like a better bet to buy a 3rd party modem. The only hassle is that the next time we have a problem with the connection, Airtel will blame the 3rd party modem.