Vodafone Idea 4G User Additions Evoke Mixed Response from Analysts

Indian telecom operators add 1.17 crores 4G users in June with the overall 4G user base now at 76.9 crores.

Highlights

  • Vodafone Idea added 18 lakhs new 4G users in June.
  • Vodafone Idea CEO said that moving users to 4G is a key focus area for the operator.
  • Vodafone Idea working with OEMs, NBFCs for 4G devices.

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Vodafone Idea 4G
Vodafone Idea, the third largest operator in India added 18 lakhs new 4G users in June, with the additions generating mixed responses from the analysts. According to the data released by the Telecom Regulatory Authority of India (Trai) on Monday, Vodafone Idea 4G user base touched 12.14 crores in June. In the previous month, the Trai data highlights that the operator had 11.96 crores 4G users, translating to an 18 lakh month-on-month increase. The additions recorded by the third largest operator in India are notable as Vodafone Idea in the previous months recorded a dip in its 4G user base.

Vodafone Idea 4G User Additions “Look Good” Says Analyst

Motilal Oswal Financial Services, an Indian diversified financial services firm, on Tuesday in a note highlighted that the 4G users in India now account for 78% of the total active users in the country.

“Additions of 1.8m for VIL (Vodafone Idea) look good after the fall in the preceding two months, but we will remain watchful to see if it is sustainable,” Motilal Oswal said in its note.

However, ICICI Securities, a subsidiary of ICICI Bank in a note on Monday said that the 4G user additions recorded by Vodafone Idea in June is “disappointing.” The firm highlighted that over 1.2 crore users across India submitted requests for mobile number portability (MNP), with the numbers suggesting that Vodafone Idea “may be losing quality customers through the MNP route.”

It has to be noted that Vodafone Idea recorded its peak 4G user base of 12.36 crores in March, with the operator losing around 40 lakh 4G users in the following two month period.

Ravinder Takkar, chief executive officer at Vodafone Idea in the first-quarter earnings call on August 16, 2021, said that moving users to 4G is a “key focus area” for the operator.

“We continue to focus on upgrading more customers to 4G plan and devices, which remains a key focus area for us,” Takkar said in the first-quarter earnings call.

The chief executive officer at Vodafone Idea said that the operator is working with original equipment manufacturers (OEM) and non-banking financial institutions (NBFC) for 4G devices.

“We aim to scale up the proportion of high ARPU subscribers through large programs in conjunction with OEMs and NBFCs for 4G device,” Takkar said.

More Users Expected to Switch to 4G with “Affordable Smartphones”

Meanwhile, Bharti Airtel also recorded an increase in its 4G user base with the Trai data highlighting that the second largest wireless operator in India added 43 lakh 4G users in June. In the previous month, Airtel witnessed its 4G user base decline by over 14 lakh users. ICICI Securities in its note said that the net 4G user additions on average recorded by Airtel was at 42 lakhs per month in the 10 month period before May, 2021.

Further, Reliance Jio continued its user additions in June, with the Trai data highlighting that the largest wireless operator in India added over 55 lakh new users in the month. Motilal Oswal highlighted that the telecom operators across India added 1.17 crores 4G users in June, with the overall 4G user base now at 76.9 crores.

In late April, GlobalData, a data and analytics company in a report said that the 4G services in India will “remain the leading technology in terms of subscriptions” in 2025. The firm said that the 2G subscriptions share in India will dip to 3.5% by the end of 2025.

Kantipudi Pradeepthi, research analyst, telecoms market data and intelligence at GlobalData, told TelecomTalk that the “affordable smartphones” would further “accelerate the switch to 4G networks.”

“With the impending launch of the low-cost smartphone, Jio is expecting to trigger the upgradation of India’s over 400 million 2G users to 4G network, especially in rural areas where Jio has already been investing in expansion of 4G network coverage,” Pradeepthi told TelecomTalk.

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Born in India, Yogesh loves to travel and has lived in multiple countries including New Zealand and Canada. His bylines can be found on various newspapers and blogs throughout the world, including Vancouver Sun, Surrey Now-Leader, Daily Hive , Investing News Network and Rach F1.

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