Vodafone Idea (Vi) has more than 50% or half of its subscriber base living in rural India. As per the Telecom Regulatory Authority of India (TRAI) report, Vi had 273.88 million subscribers at the end of the June 2021 quarter. The telco lost more than 10 million subscribers when compared with the previous quarter. However, on an interesting note, Vodafone Idea has 50.98% of its subscribers located in rural India. Even though the telco’s market share in rural subscribers is 26.02% which is lower than that of Airtel (32.01%) and Jio’s (34.77%), Vodafone Idea has a significant number of users living in the rural country.
This could mean two things. First, the rural subscribers love the telco’s network services, or the urban city users just don’t want to latch on to Vi’s networks.
Vodafone Idea ARPU Might be Affected Because of This
Not to take anything away from the people living in rural India, but the general consensus and the logic would suggest that people in the rural areas won’t spend as much as people in the urban cities will do in consuming mobile services. Because Vi’s half of the subscribers live in rural India, its average revenue per user (ARPU) might be dropping.
Further, a lot of 4G users in rural India might be using Vodafone Idea’s Rs 49 plan, which was discontinued in the September quarter. This could be a contributing factor for Vi losing subscribers in August 2021.
What Vi needs right now is a higher ARPU. The telco wouldn’t want to stick with low ARPU customers for long because of its bad cash flow position so far. While the relief measure will help, a tariff hike is required for Vi to sustain in the long term.
Vi has over 139.61 million subscribers living in rural India. Compared to this, Airtel has 171.73 million, and Jio has 186.56 million subscribers in the rural parts of the country.