Vodafone Idea launches 5G with entry-level plan at 20% lower than rivals

Vodafone Idea, India’s third-largest telecom operator, has officially launched its 5G services in Mumbai. The announcement was made by the company’s Chief Technology Officer, Jagbir Singh.

Following this launch, the company plans to expand its 5G network to Delhi, Bengaluru, Chandigarh, Patna, and Mysore by April. In the subsequent phases, Vodafone Idea will bring 5G services to Maharashtra, Gujarat, Kerala, and Chennai circles.

Satellite Internet Partnerships Under Consideration

Vodafone Idea is also in discussions with multiple partners to provide satellite internet services. Although specific details remain undisclosed, the company has not confirmed a tie-up with Starlink. This move indicates the telecom giant’s intention to strengthen its connectivity offerings and explore new technological frontiers.

Competitive 5G Pricing Strategy

Vodafone Idea’s 5G services come with a competitive pricing structure. The company’s introductory unlimited 5G plans start at Rs 299, offering a significant discount compared to its competitors. Jio’s entry-level unlimited 5G plan is priced at Rs 349 for 28 days with 2GB of 4G data per day, while Airtel’s plan costs Rs 379 per month with a similar 2GB daily data limit. In contrast, Vodafone Idea’s Rs 299 plan offers 1GB of 4G data per day for 28 days.

Increasing 5G Handset Penetration

One of the advantages of Vodafone Idea’s delayed 5G rollout is the increase in 5G handset adoption. According to Jagbir Singh, around 30-35% of Vodafone Idea’s user base in major cities now owns 5G-compatible devices. Given the company’s total subscriber base of 199.8 million as of December 2023, this translates to an estimated 60-70 million 5G devices on its network.

Future Expansion and 5G Site Deployments

Over the next three years, Vodafone Idea aims to establish 75,000 5G sites in 75 cities across 17 priority circles. The company’s ambitious expansion plan is backed by an Rs 18,000 crore follow-on public offering (FPO) and additional equity infusion from promoters. Following this, Vodafone Idea secured a Rs 30,000 crore deal with telecom equipment providers Ericsson, Nokia, and Samsung to supply 4G and 5G network infrastructure.

Limited Deployment Compared to Competitors

Despite its efforts, Vodafone Idea’s 5G rollout is significantly smaller than that of Reliance Jio and Bharti Airtel, which have collectively deployed over 460,000 5G base transceiver stations (BTS) since October 2022. However, the company is optimistic about the monetization of 5G, with sectors like telemedicine, IoT-enabled smart cities, and AR/VR applications in gaming and education presenting growth opportunities.

Exploring Fixed Wireless Access (FWA) Services

Vodafone Idea is currently testing Fixed Wireless Access (FWA) technology, which provides high-speed 5G broadband without fiber optic cables. FWA is considered one of the most viable monetization strategies for 5G. However, the company has yet to announce a commercial launch timeline for the service.

Non-Standalone 5G and Future Plans for Standalone 5G

Like Bharti Airtel, Vodafone Idea is deploying its 5G services using non-standalone (NSA) technology, which integrates 5G with existing 4G infrastructure. When asked about plans for standalone (SA) 5G deployment, Singh stated that NSA technology is currently sufficient to meet customer demands. The company plans to initiate trials for SA 5G in the near future to ensure a smooth transition when needed.

Potential Partnership with Satellite Internet Providers

Vodafone Idea is actively evaluating partnerships in the satellite internet sector. While competitors Jio and Airtel have partnered with Starlink and other satellite operators, Vodafone Idea is keeping its options open and engaging in discussions with multiple providers. The company has yet to disclose specific details about its plans in this area.

Vodafone Idea’s Financial Strength and Investment Plans

Vodafone Idea has significantly strengthened its financial position over the past year, raising Rs 26,000 crore in equity. This includes Rs 18,000 crore from its FPO, Rs 4,000 crore from promoter contributions, and Rs 4,000 crore in equity issued to key vendors. These funds are crucial for supporting its 5G expansion and improving its network infrastructure.

Conclusion

With its 5G launch, Vodafone Idea is making a strong push to regain its competitive edge in the Indian telecom market. The company’s strategic pricing, network expansion, and partnerships in emerging technologies like satellite internet and FWA demonstrate its commitment to innovation. As Vodafone Idea continues its rollout across major cities, it aims to capture a significant share of India’s growing 5G user base.