Vodafone Idea (Vi), the third-largest telecom operator in India, benefitted from a government scheme and added 4G subscribers during Q2 FY24 because of that. The Rajasthan government partnered with Vodafone Idea to offer free smartphones and mobile connections to females in the state. The move from the government was to entice potential female voters in the state as elections approach. This turned out to be a positive thing for the struggling Vi. Over 2.5 million new connections were distributed.
Since the merger in 2018, Vi has never added as many 4G subscribers in a single quarter as it did in Q2 FY24. The telco gained 1.8 million 4G users during the quarter and reported the lowest-ever quarterly user base decline of 1.6 million. At the end of September 2023, Vi's 4G subscriber base stood at 124.7 million.
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As per an ET report, a top Rajasthan govt official confirmed that Vodafone Idea provided a majority of the mobile connections for the scheme. The scheme is called Indira Gandhi Smartphone Yojna (IGSY). Apart from Vi, BSNL was the other telco that participated. At first, Airtel and Jio were the top contenders, but the two leading telcos backed out once the govt demanded that with the connections, they also have to provide free smartphones.
A majority of the free mobile connections were provided by Vi under the scheme. Since the smartphones offered under the scheme were likely 4G, the telco could add 4G subscribers. In the long run, it will help Vi in increasing its revenues from the 4G user base. But here's where things have become interesting.
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The current government has promised that if the voters bring them back to power, they will increase the number from 2.5 million to 10 million. It will also pose an opportunity for Vi to garner more 4G subscribers in the next one year.