During Vodafone Idea's (VIL) Q1 earnings call on Tuesday, CEO Akshaya Moondra addressed a noticeable trend: an increase in subscriber port-outs to Bharat Sanchar Nigam Ltd (BSNL) following recent tariff hikes by Vodafone Idea. Moondra acknowledged that the company is closely monitoring this development. He pointed out that the migration to BSNL has surged compared to pre-tariff increase levels, primarily because BSNL has not raised its tariffs, creating a price advantage for the state-owned operator.
Moondra attributed the subscriber migration to the tariff hikes implemented by Vodafone Idea, which saw an increase of 11-24 percent. BSNL’s decision to maintain its tariff rates has created a situation where customers perceive a cost benefit, leading them to switch providers. This tariff gap has led to a significant number of Vodafone Idea’s prepaid customers choosing to port out to BSNL for more affordable service options.
Despite the current trend of customers moving to BSNL, Moondra believes that this shift may not be permanent. He suggested that the quick decisions to switch carriers might be influenced primarily by tariff changes rather than a comprehensive assessment of service quality. Moondra expressed confidence that customers accustomed to Vodafone Idea’s extensive 4G coverage and superior network experience might eventually return, given the limitations of BSNL’s current 4G service offering. He emphasized that Vodafone Idea is vigilant about the situation and is prepared to adapt its strategies as needed.
The broader telecom sector has seen similar moves from major operators. Both Reliance Jio and Bharti Airtel have announced tariff hikes effective from July 3, 2024. Airtel’s tariffs have increased by 10%-21%, while Jio has raised its rates by 13%-27%. Vodafone Idea’s recent tariff adjustments, implemented on July 4, 2024, align with this trend of rising costs in the telecom industry. The company's revised plans for both prepaid and post-paid customers reflect these changes.
Vodafone Idea’s updated prepaid plans feature notable price adjustments:
Existing Plan Price: Rs 179 for 28 days with 2GB data, unlimited calling, and 300 SMS.
New Plan Price: Rs 199 for the same benefits.
Existing Plan Price: Rs 459 for 84 days with 6GB data, unlimited calling, and 300 SMS.
New Plan Price: Rs 509 for the same benefits.
Existing Plan Price: Rs 1799 for 365 days with 24GB data, unlimited calling, and 300 SMS.
New Plan Price: Rs 1999 for the same benefits.
Existing Plan Price: Rs 269 for 28 days with 1GB data per day, unlimited calling, and 100 SMS per day.
New Plan Price: Rs 299 with 1.5GB data per day, unlimited data from 12am to 6am, weekend data rollover, and 100 SMS per day.
Existing Plan Price: Rs 319 for 1 month with 2GB data per day, unlimited data from 12am to 6am, and 100 SMS per day.
New Plan Price: Rs 379 for the same benefits.
Existing Plan Price: Rs 479 for 56 days with 1GB data per day, unlimited calling, and 100 SMS per day.
New Plan Price: Rs 539 for the same benefits.
Existing Plan Price: Rs 719 for 84 days with 1GB data per day, unlimited calling, and 100 SMS per day.
New Plan Price: Rs 839 for the same benefits.
Existing Plan Price: Rs 2899 for 365 days with 1GB data per day.
New Plan Price: Rs 3499 for the same benefits.
Existing Plan Price: Rs 19 for 1 day with 1GB data.
New Plan Price: Rs 22 for the same benefits.
Existing Plan Price: Rs 39 for 3 days with 6GB data.
New Plan Price: Rs 48 for the same benefits.
Vodafone Idea’s new postpaid plans reflect the ongoing tariff trends within the telecom industry. The changes align with the broader increases seen across major telecom operators, including Airtel and Jio.
Conclusion
Vodafone Idea’s recent tariff hikes have influenced a noticeable shift in customer behavior, with many prepaid users opting to switch to BSNL. While this migration is driven by immediate cost considerations, the long-term impact on Vodafone Idea will depend on how customers value network quality and coverage compared to tariff rates. As the telecom sector continues to evolve, Vodafone Idea’s response to these challenges will be crucial in retaining and attracting customers amidst a competitive landscape.