Vodafone Idea (Vi) is preparing to enter the 5G mobile broadband market in March 2025 with 'aggressively priced plans' aimed at reclaiming customers from Reliance Jio and Bharti Airtel, which already dominate the 5G landscape. Vi plans to initially focus on 75 major cities across its 17 priority circles, targeting both urban and industrial zones known for high data consumption, ET reported, citing sources familiar with the matter.
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Aggressive Pricing Strategy
Vi is expected to price its entry-level 5G plans up to 15 percent lower than those of Jio and Airtel, potentially sparking a price war, according to the report. CEO Akshaya Moondra, during the recent earnings call, hinted that final pricing decisions would be made closer to launch, aligning with Vi's strategy to attract price-sensitive customers and stem subscriber losses.
"We are gearing up to launch 5G services and are committed to providing the best experience and price,” a Vi spokesperson reportedly said. The company would be able to further enhance its 4G coverage and introduce 5G in key cities at the earliest as it holds sufficient and competitive 5G spectrum in its 17 priority markets, the spokesperson added.
According to the report, Vi did not comment on queries regarding the prospects of discounted 5G plants and higher spending on dealer commissions.
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Network Expansion
Vi recently closed Rs 30,000 crore worth of deals with Nokia, Ericsson, and Samsung for 4G and 5G network upgrades. The telco is accelerating the deployment of 5G base stations, aiming for 75,000 sites over three years, using a combination of 3.5 GHz and 1,800 MHz spectrum bands for its initial rollouts.
"Gear supplies are underway and Vi is rapidly deploying 5G base stations, targeting around 75,000 5G sites in three years, industry executives aware of its plans said," according to the report.
As of September end, Reliance Jio and Bharti Airtel had 148 million and 105 million 5G users, respectively.
Also Read: Reliance Jio Slows Down 5G Expansion Amid Monetisation Issues: Report
Financial Challenges
The report cited an analyst stating, "Vi may not go overboard in undercutting Jio and Airtel on the 5G front as this could stifle ARPU growth, increasing the debt-laden telco’s financial challenges."
Dealer Incentives
To regain market share, Vi may increase dealer commissions and promotional spending, a strategy already reflected in its higher dealer payout of Rs 3,583 crore in FY24, compared to Jio's Rs 3,000 crore, the report noted.
Also Read: Vodafone Idea to Launch 5G in 17 Circles by March 2025: Report
Financial Backing
Vi's plans are bolstered by Rs 24,000 crore in equity funding and an expected Rs 25,000 crore in debt, aided by recent government support, including waiving bank guarantee requirements.
"We're excited to supercharge our network and add several thousand new sites by March 2025 for enhanced connectivity and roll out 5G to revolutionise the digital experience for Vi users," the Vi spokesperson reportedly said.
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Experts predict that success in the 5G market will depend on a blend of affordable pricing and superior user experience, the report concluded.
