Vodafone Idea Announces India’s 5G Launch Plan

India’s third-largest service provider, Vodafone Idea, is preparing to launch 5G services in late 2024.
Akshay Moondra, CEO of Vodafone Idea, said at a press conference, “We have fulfilled our obligation to deploy 5G as a minimum. We have also completed testing and now we need to deploy 5G.”
The company plans to cover 40% of its revenue base in the next 24-30 months, initially focusing on launching 5G in 17 service sectors. It will also invest in enhancing its 4G network and capacity.
According to media reports, the service provider will initially invest INR 57.2 billion (USD 680 million), of which INR 180 billion (USD 2.15 billion) will be raised through subsequent public offerings (FPOs) to build 5G networks. It also plans to spend 127.5 billion rupees (1.52 billion US dollars) to establish new 4G sites and increase the capacity of existing 4G networks.
Importantly, the company will invest more funds in 4G networks instead of building 5G networks. This may be because Vodafone Idea urgently needs to increase Average Revenue per User (ARPU), and 5G is unlikely to achieve this, at least in the short term.

Moondra mentioned at a press conference that about 42% of Vodafone Idea users are still using 2G, and the improved 4G network will help the telecommunications company migrate these users to 4G, which will also help improve its ARPU. As of the quarter ending December 2023, the telecommunications company’s ARPU was 145 Indian rupees (1.7 US dollars), far lower than Airtel’s 208 Indian rupees (2.48 US dollars) and Jio’s 181.70 Indian rupees (2.17 US dollars).
With the expansion of 4G cards, telecommunications companies may target the rural market, where data consumption continues to grow. It will face fierce competition from Airtel and Jio, both companies now focusing on new users in rural areas and migrating 2G users to 4G.
Vodafone Idea is also in negotiations with all major suppliers regarding 5G equipment. It recently conducted an open RAN pilot with Mavenir in the news.
Obviously, the success of financing and the announcement of the 5G plan are positive steps to ensure the presence of Vodafone Idea in India. However, in order for the company to engage in meaningful competition with Reliance Jie and Bharti Airtel, it will need to put in more effort. Two other private telecommunications companies launched 5G in 2022, which gave them a crucial start.
Nevertheless, the management of Vodafone Idea and the entire industry can breathe a sigh of relief today, as the telecommunications company will occupy a longer period of time in the Indian telecommunications industry.