Vodafone Idea Limited (VIL), a prominent player in the Indian telecommunications sector, is gearing up to launch its 5G services within the next six months. During the Q4 FY24 investor call, Akshaya Moondra, CEO of VIL, confirmed the timeline for the rollout, targeting November 2024. The company’s strategic focus for the initial phase of the 5G rollout will be urban cities, where there is a higher concentration of 5G-capable devices.
5G Expansion Plans
Vodafone Idea will kickstart its 5G journey by deploying Non-Standalone Architecture (NSA) technology. The telecom giant has already showcased its 5G Fixed-Wireless Access (FWA) solution named Vi AirFiber at the Indian Mobile Congress (IMC) 2023. Currently, VIL has initiated 5G services in four circles across India, including Maharashtra (Pune), Delhi, Punjab, and Chennai. However, the company has yet to fulfill the minimum rollout obligations.
Financial Boost and Growth Strategy
The delay in VIL’s 5G rollout was attributed to funding constraints. However, with a recent infusion of Rs 20,000 crore in equity, the company is now poised to accelerate its capital expenditure (capex) towards expanding its 4G network and facilitating the deployment of 5G infrastructure. This financial boost marks a significant step forward for Vodafone Idea in overcoming operational hurdles and realizing its ambitious growth objectives.
Addressing Customer Needs
Vodafone Idea has been facing challenges in retaining its customer base due to the absence of 5G offerings, unlike its competitors Airtel and Jio, who have been providing unlimited 5G data to their subscribers. Consequently, VIL witnessed a decline in its active user base from over 200 million to 193 million within a year. While the Average Revenue Per User (ARPU) growth displayed a commendable Compound Annual Growth Rate (CAGR), standing as the highest in the industry, the current ARPU of Rs 146 falls behind that of Jio (Rs 181.7) and Airtel (Rs 209).
Future Outlook: Tariff Hike and Growth Prospects
To catalyze meaningful growth in ARPU numbers, the telecom industry requires a tariff hike. Vodafone Idea, along with other telcos, is eagerly anticipating regulatory measures to facilitate this tariff revision, which would enable sustainable revenue growth and bolster financial viability in the long term.
As Vodafone Idea prepares to usher in the era of 5G connectivity in India, its strategic initiatives underscore a commitment to innovation, customer-centricity, and market competitiveness. The upcoming 5G rollout signifies a pivotal milestone in VIL’s journey towards delivering cutting-edge telecommunications services and driving digital transformation across the nation.
