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Highlights
- Vodafone Idea Limited (VIL), the third-largest telecom operator in India, has been trying to rollout new 4G sites and add new customers.
- To rollout the network infrastructure faster, one of the workarounds that the company has figured out is an infrastructure sharing agreement with the state-run telecom company BSNL.
- However, something which the industry does not talk much about is the fact that Vi has millions of 2G users.
Andrew Bonwick
Vice President of Product Development at Relm Insurance
Madhav Sheth
CEO of Ai+ Smartphone
Stephen Rose
CEO Render Networks
Vodafone Idea Limited (VIL), the third-largest telecom operator in India, has been trying to rollout new 4G sites and add new customers. To rollout the network infrastructure faster, one of the workarounds that the company has figured out is an infrastructure sharing agreement with the state-run telecom company BSNL. However, something which the industry does not talk much about is the fact that Vi has millions of 2G users. If the telco is able to convert these users into 4G/5G customer base, that would automatically give a meaningful jump to the average revenue per user (ARPU).
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Vi said that its 34% of the customer base is still latched onto the 2G networks. This could be because of no 4G presence in the area where the customers live or it could be because they simply don’t have 4G phone and are satisfied with 2G services. Vi has been growing its ARPU as the data consumption by the users is going up. With more funds in the pockets, the telecom operator will be able to rollout 4G and 5G in new areas further translating to more data users and consumption, leading to a higher ARPU naturally.
Vodafone Idea 2G Users are a Pain for the Company
In hindsight, Vi has to spend money to keep the 2G networks up and running for customers who are actually contributing less meaningfully to the company’s topline revenues. Thus, even Vi would want to get rid of such customers as fast as possible. The telco would want these customers to stay on its networks only, but not on the 2G network, instead the 4G and 5G network. The telecom operator is in the process of raising funds from SBI led consortium via debt. The management has maintained that the discussions are in advanced stages with the banks, and a positive outcome is possible.
