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Delay in rolling out 5G may hurt Vodafone Idea badly.

The lack of 5G has already started to negatively impact cash-strapped Vodafone Idea’s key performance measures, particularly the subscribers’ per capita data consumption, and might result in the loss of their core, high-paying customers in the upcoming quarters, according to experts.

While per capita data usage for both Vodafone Idea (Vi) and Bharti Airtel exhibited flat quarter-over-quarter growth, the latter’s strong push for 5G service development in the nation is anticipated to dramatically increase this indicator over the following 12 to 18 months, they noted.

Vodafone Idea has a per-person data use of 15.1 GB as of March 31, 2023, compared to Airtel’s 20.3 GB. In this aspect, both displayed flat growth on a quarterly basis. VI’s per-person data consumption is anticipated to reach 20 GB over the next 12 to 18 months, while Airtel’s is anticipated to reach 30 GB.

With a rise in per capita data usage, market leader Reliance Jio is already observing the effects of 5G customers on data consumption. This statistic increased to 23.1 GB for the March quarter from 22.4 GB for the fiscal third quarter. This amount is anticipated to far exceed 30 GB over the ensuing 12 to 18 months.

Beginning with a gradual rollout of their 5G services throughout the nation in October 2022, Airtel and Jio have intensified their efforts over the past six months to reach as many areas as possible. Both want to have extensive 5G coverage by March 2024, so there isn’t much time left for Vi to launch its 5G campaign.

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Vodafone might experience negative consequences:

VI may see a number of negative effects if it is unable to push data consumption on its network, including a slowing in the rise of average revenue per user (ARPU) and long-term increases in attrition. Vi stands to lose clients even after introducing the next generation of telecom technology on its network since the quality of service will be compared to the already existing networks of its competitors, who are more than three quarters ahead of Vi in the 5G rollout.

The network will need at least two quarters to stabilise when 5G is introduced. Vi may lose users to competitors because to subpar 5G coverage by the time Airtel and Jio’s 5G networks are operational, noted Jain.

The telco has been unable to invest in boosting 4G coverage and launching 5G service due to its inability to raise money through debt or equity sales.

Even though many people in the country do not have 5G capable handsets yet, a good quantity of people do. It would be a safer option for Vodafone to launch 5G services as soon as possible even if not a lot of people use it.

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