Vodafone Idea Free Data Could Not Make Up for Disappointment of Subscribers

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Vodafone Idea

There are two telecom operators in the industry right now that are doing significantly worse than the incumbent telecom operators, and even before we have said it, you can guess that we are talking about the private telecom operator Vodafone Idea and the public telecom company Bharat Sanchar Nigam Limited (BSNL). You might ask why I say that with conviction, but it’s not just me, but the TRAI data sings the same tune. In February of 2021, things seemed to be going well for Vodafone Idea, as the company broke the two-year streak of not adding a single subscriber and continuously losing one. This was taken as a signal that the telco might finally be turning around its luck and financials. But, the latest TRAI data for the month of April has painted an entirely different picture.

Vodafone Idea Brutal Subscriber Churn After a Good Month

Things started going wrong for Vodafone Idea post the network integration exercise, as the network troubles for the subscribers were enough to give them a nudge towards the other competing telcos. As a result, the subscribers did not wait to port their SIMs to Reliance Jio and Bharti Airtel. As for the new subscribers' addition, the JioPhone phenomenon dragged on the further subscriber addition in Jio’s side aided with the cheap plans and additional Freedom plans offering extra data. This resulted in the brunt for Vodafone Idea, which continued its churn of subscribers and still persists on the same path.

As per the TRAI report based on April month, Vodafone Idea has lost 1.8 million subscribers, whereas Reliance Jio added 4.7 million more subscribers. Close to Vodafone Idea, BSNL also lost 1.3 million subscribers, whereas Bharti Airtel stood in a comparatively neutral position while adding a mere 0.5 million subscribers. Although the position of BSNL is pretty understandable that subscribers would likely migrate to other telcos for a better network and the lack of a 4G network is the single biggest reason for the churn, the story of Vodafone Idea is a little more tricky than that.

Vodafone Idea Must Get Its House in Order

Vodafone Idea’s sporadic network in a lot of cases and its position in the download speeds chart also gives us a hint about why the telco might be in this position. Currently, Vodafone Idea is looking towards an equity infusion of Rs 22,400 crore or $ 3 billion from various sources, one of which might be Apollo Global Management. Nonetheless, the attempt of Vodafone Idea by providing a lot more free data using services like Weekend Binge and Data rollover clearly does not seem to be working because the customers are finding the cons to be heavier than the pros. It is worth noting that the weekend binge and the data rollover features are something that no other telecom company is offering in India right now.

It is quite interesting to see that despite so many offers, free data offerings, and a lot of lures, the customers still seem to be migrating away from Vodafone Idea. Currently, with so much on stake and such churn of subscribers from the Vodafone Idea pie, the telco’s first priority should be to get its finances in order, even at the cost of heavy equity dilution. Because, looking at the current situation of the telco, the acquisition of bank guarantees and a hefty dilution seems inevitable from the point of view of any investor. The second thing to get the Vi house in order should be to focus heavily on the network infrastructure while retaining the existing customers. The other impetus might be left to the DoT, as the floor pricing would work wonders for the telco's survival.

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Arpit spends his day closely following the telecom and tech industry. A music connoisseur and a night owl, he also takes a deep interest in the Indian technology start-up scene and spends rest of his time spilling poetry and stories on paper.

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