Vodafone Idea (Vi) is in an interesting position right now. All the relief measures provided to the telecom sector have ensured that Vi is not going to go out of the market. But the company hasn’t made big improvements either. At this stage, it is not just a game of branding or offering more benefits. Telcos now need to differentiate on the basis of the quality of network services. Vi needs to show that it is better than Airtel and Jio in several areas apart from just delivering faster download and upload speeds. Consumers online have been asking for VoWi-Fi services in Southern India as well as other parts of North India. Vi must address these demands as soon as possible.
Telcos Need to Add Subscribers, Drive ARPU UP and Deliver Profits
The investors of the telcos just want to go see the company adding new active subscribers, earning more out of each of them, meaning a higher ARPU (average revenue per user) figure, and then deliver profits at the end of the day. This is what Vodafone Idea hasn’t been able to do.
The primary goal of the telco right now should be to add subscribers instead of growing ARPU aggressively. The more 4G customers it has on the existing network infrastructure, the more money it will make. ARPU figure can be pushed ahead with loyal subscribers in the mix.
Vi has been focusing too much on increasing ARPU. Its tariffs should have ideally been where Jio is at right now. It would have helped the telco in competing with Airtel. Vi offers great additional benefits with its prepaid plans.
If Vi’s tariffs were the same as Jio’s, it would have pushed more people to opt for Vi plans, as bonus data offers with Vi would have been a way better deal than what you are getting with Jio.
On the other hand, Vi needs money from external investors. For that, the telco must improve ARPU as well. This is why Vodafone Idea’s situation is interesting right now. The government is going to take a major equity piece in the company, which is further going to solidify the statement that Vi is not going to go out of business in the foreseeable future.
With the funds that Vi might raise in the near future, it can boost its 4G network expansion, and enhancement plans to come into a strong position to compete with Jio and Airtel.
