BackVodafone Idea faces tough task to stop user exits, start 5G
Vodafone Idea has been losing subscribers, with 25 mn more since Oct, taking its customer base to 243 mn as of Nov
PremiumMumbai: Vodafone Idea faces the critical task of arresting its shrinking user base and winning new users along with launching 5G services to score a recovery in the short term even as the debt-laden telecom operator talks to banks to refinance existing loans and seek fresh loans for capex needs, said industry insiders.
“Now that the equity conversion from the government has been done, Vodafone Idea has to get back in the game of winning back customers, with more than one offerings for consumers because their rivals are offering 5G services, which they are yet to launch," said a senior industry executive, who didn’t want to be named.
The executive referred to the ₹99 plan that the No. 3 carrier has announced in several non-metro circles that offers metered-billing with talk time of ₹99, outgoing calls chargeable at 2.5 paise per second and 200 MB of 4G data, valid for 28 days. This is similar to the one discontinued by No. 2 carrier Bharti Airtel in 17 circles where it has instead launched an unlimited calls and data pack of ₹155 as the starting plan for prepaid users.
Vodafone Idea has been losing subscribers, with 25 million more since October 2021, taking its customer base to 243 million as of November. The only silver lining is the carrier has been able to retain its postpaid user base of 21 million.
But Airtel, like its rival and No.1 carrier Reliance Jio that has launched 5G in over 236 cities, is also offering 5G services in over 70 cities at the same tariff levels as 4G, thus drawing customers over from rivals, mainly from Vodafone Idea. This is seen from the tally of porting requests rising over the past year to over 12 million in November, as per the latest data from the Telecom Regulatory Authority of India.
“VIdea is still vulnerable to subscriber and market share losses, as Reliance Jio and Bharti Airtel are rolling out 5G while VIdea is lagging in even 4G capex spending and there has been uncertainty over its 5G rollout with a delay in planned fund raising," CLSA analysts said in a note.
A second industry executive said Vodafone Idea had been in talks with Nokia and Ericsson to buy 5G equipment prior to the government taking a stake in the loss-making carrier but it didn’t materialize due to pending receivables and the firms seeking advance payments. “They’ve begun talking again, but the issue of funding remains," the executive said, also requesting anonymity.
Queries sent to Vodafone Idea didn’t elicit a response.
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