Vodafone Idea Limited (VIL) recently hiked the tariffs of prepaid and postpaid mobile plans for its customers. The telco's move coincided with the announcement from Jio and Airtel to raise the prices. For Vi, the situation is slightly different than the other two private telcos. Vi has been losing customers at a rapid pace over the last few years. The telco has not been able to put a full stop to subscriber loss and this tariff hike could worsen the problem.
Due to an inferior network experience, customers are choosing telecom operators like Airtel and Jio because Vi doesn't have the 4G availability or the coverage that its competitors do. Further, the other two telcos have also launched 5G, which Vi is yet to do. Now analysts believe that this tariff hike could drive away more users from the networks of Vi. Airtel and Jio want to capture the lower-end users of Vi. If you notice, Jio didn't increase the prices of JioBharat or JioPhone plans for customers.
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There are plenty of 2G users on Vi's networks. For the quarter ending March 2023, there were 86.3 million 2G or legacy network users with Vi. This is about 40% of the telco's customer base. Both Airtel and Jio would want to capture these customers and provide them with better options and network experience.
Vi has acquired sub-GHz spectrum in several circles for the first time to improve indoor network coverage. This would definitely make a huge difference in the network experience for customers, however, it might not just be enough. It will be interesting to see if Vi continues to offer the Rs 99 plan that it is currently providing to users for 15 days, after the tariff hikes are implemented.
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At present, amongst the private telecom operators, Vi is offering the cheapest 4G plan of Rs 99. Post the tariff hikes, it will be crucial to monitor the base tariffs of the telcos with which majority of the country recharges.
