Vodafone Idea (Vi) is making significant strides in the Indian telecommunications industry as it recently launched its commercial 5G services in Mumbai, marking a substantial entry into the next generation of mobile connectivity. CTO Jagbir Singh stated that Vi is deploying advanced wireless broadband technology that promises to deliver tangible benefits compared to its rivals, who have been providing 5G services for over two years. "In two years, things have changed. We are using AI-based self-organising network (SON), which optimizes network resources for optimal use among customers," Singh told ETTelecom, emphasizing Vi's strategic advantage in leveraging cutting-edge technology.
As of March 19, 2025, the telecom service provider is set to expand its services to Bangalore, Chandigarh, Patna, and Mysore by the end of April 2025. With an introductory offer starting at Rs 299 in Mumbai for unlimited 5G access, Vi aims to attract customers during this crucial rollout phase. Singh pointed out that their newest technology is not only efficient but also lightweight and equipped with improved features that enhance consumer experience.
Vi's entry into the 5G market comes after competitors Reliance Jio and Bharti Airtel, who launched their services in late 2022, signaling a critical moment for the telecom provider, which faced financial constraints previously. The joint venture between the Aditya Birla Group and UK-based Vodafone Plc is directing significant resources towards infrastructure enhancement, with a Rs 55,000 crore three-year capital expenditure plan, half of which is allocated for 5G network development.
In September 2024, Vi placed a massive equipment order worth Rs 30,000 crore with leading technology vendors including Ericsson, Nokia, and Samsung. This procurement represents a crucial step for Vi as it looks to upgrade and optimize its network capabilities while prioritizing 17 service circles across India.
Additionally, in addressing concerns over legacy equipment, Vi is in the process of replacing Chinese gear in cities like Chandigarh, Bangalore, and Patna, redistributing it to rural areas where it has not yet reached the end of its life cycle. Singh elaborated, "As we are planning to launch 5G in Chandigarh, Bangalore, and Patna, we are trying to balance the vendor ecosystem, which now includes Samsung as a key player in our strategy."
Vi plans to introduce 5G standalone (SA) architecture by mid-2025 which is expected to help subscribers transition seamlessly between 4G and 5G networks. "The scientific analysis for deployment is based on device penetration and traffic patterns in residential and commercial areas," Singh added.
Moreover, Vi is also initiating discussions with satellite communication firms like Starlink and OneWeb, seeking to provide telecom services in challenging, underserved areas where traditional infrastructure installation is impractical. "We are assessing satellite internet as a potential service to enable connectivity in remote locations," Singh said, although he acknowledged that regulatory approval remains a significant hurdle, echoing the challenges faced by its larger competitors who have partnered with NASA's SpaceX for Starlink services.
Despite the optimism around its 5G rollout, concerns linger regarding customer retention. Reports highlight a decline in Vi's subscriber base, which decreased by 7.1% year-on-year in the December quarter to 199.8 million, although the net loss narrowed from ₹6,986 crore to ₹6,609 crore during the same period. Analysts emphasize that maintaining and enhancing its average revenue per user (ARPU), which currently stands at ₹173, is critical for the company's growth and sustainability.
Vodafone Idea has set ambitious targets to establish 75,000 5G sites over three years and has rapidly added more than 100,000 sites across various bands, including an impressive 55,000 sites on the 900 MHz spectrum band. The company is also exploring fixed wireless access (FWA) services to offer high-speed broadband, particularly in urban settings.
As the firm navigates the competitive landscape enhanced by its rivals' satellite internet strategies, analysts expect that Vodafone Idea's partnership potential with enterprise sectors such as automotive, mining, and logistics could be a game-changer. Singh noted that further deployment of their 5G services would contribute to reducing churn rates, boosting customer loyalty.
Despite the intensifying competition, analysts remain cautious about Vodafone Idea's long-term success, stating that a favorable government environment and ARPU increase to over ₹370 by FY 2027 is essential to meeting its financial obligations, including huge dues related to adjusted gross revenue (AGR) amounting to approximately ₹80,000 crore.
As Vodafone Idea forges ahead with both its 5G and satellite internet strategies, the forthcoming months will be critical in determining its market positioning and financial health against established players in the telecom sector.
