Vodafone Idea 4G Subscribers Rise, Might Help With Revenues

Vi’s ARPU (blended) has dropped from Rs 114 in Q1 FY21 to Rs 104 in Q1 FY22. Now it is worth noting that the telco added new subscribers for consecutive months which are February and March. So these 4G subscribers might have joined the company very recently.

Highlights

  • Vi’s ARPU (blended) has dropped from Rs 114 in Q1 FY21 to Rs 104 in Q2 FY22
  • This could mean one thing - the high paying customers of the telco are leaving the network
  • Vodafone Idea has been working non-stop in coming out with better offers for its 4G customers

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Vodafone Idea

Vodafone Idea has been working non-stop in coming out with better offers for its 4G customers and the telco has succeeded in doing that by a long margin. The plans that Vodafone Idea offers to its customers are unparalleled by any other operator in the market. It is very true that offers such as ‘Binge All Night’ and ‘Weekend Data Rollover’ are the best that any operator is offering and it might have helped Vi in adding new customers. To be precise, new 4G customers. There is no denying that Vodafone Idea has lost subscribers in a bunch in the last few years. But its 4G users have risen in number over the last year.

Vodafone Idea 4G Subscriber Base Rose Last Year

Yes, the telco’s overall subscribers declined from 279.8 million in Q1 FY21 to 255.4 million in Q1 FY22. But at the same time, Vodafone Idea’s 4G subscribers grew from 104.6 million in Q1 FY21 to 112.9 million in Q1 FY22.

For those of you who don’t understand. Vodafone Idea’s (Vi) subscriber base is made up of 2G, 3G and 4G subscribers. So while the telco’s total subscriber base declined, its 4G users rose in number. If there’s any positive that Vi and its investors would want to take from the report, this would be right at the top of the list.

Not only this, but Vi actually invested a ton on its network and its 4G coverage in terms of population and the numbers grew from 990 million in Q1 FY21 to 1,007 million in Q1 FY22. But the sad part is, the telco’s revenues are still stuck. Vi’s average revenue per user (ARPU) was quite low and I might know the reason.

Vodafone Idea High Paying Customers Might Be Leaving the Network

I could be wrong, but I am going to take a wild but educated guess here. If Vi has added new 4G subscribers and its overall subscriber base has declined, it should mean that there is a higher percentage of 4G users in the total subscriber pool of the telco. In an ideal scenario, if there are more 4G subscribers than the 2G/3G subscribers, it means that the telco’s ARPU should go up.

But interestingly, Vi’s ARPU (blended) has dropped from Rs 114 in Q1 FY21 to Rs 104 in Q1 FY22. Now it is worth noting that the telco added new subscribers for consecutive months which are February and March. So these 4G subscribers might have joined the company very recently. Still, that should have converted into an increased ARPU which did not happen.

This could mean one thing - the high paying customers of the telco are leaving the network. Maybe the offers aren’t just good enough for them. Or Maybe, Vodafone Idea high paying subscribers are leaving the network because of Airtel and Jio offering superior coverage. There could be ’n’ number of reasons but if the telco’s high ARPU customers leave the network, things won’t end well.

But there’s also a silver lining in the figures shared by the company.

Vodafone Idea Rise in 4G Subscribers Can Help Company Earn More

The tariff hikes have already started in a subtle way by the operators and it might almost be the time when Vodafone Idea would go all in. The telco has been waiting for Airtel and Jio to be ready to do that as well.

With more 4G subscribers, the telco stands a chance to earn more revenues as the tariffs go up. But at the same time, Vi would desperately try to retain its users and hopefully add some new ones. If Vi can add more 4G subscribers and go with the tariff hike and get a relief package from the government; it might set things straight for the company in the coming years.

But again, this is just an opinion, and there’s frankly no reason why not to put your hopes up for a company that’s been battling out the storm for so long.

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Tanay is someone with whom you can chill and talk about technology and life. A fitness enthusiast and cricketer, he loves to read and write.

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