Vodafone Idea (Vi) is preparing to enter the 5G market, and CEO Akshaya Moondra has hinted that the company may adopt a pricing strategy lower than its bigger competitors, Reliance Jio and Bharti Airtel, to attract customers. As a new entrant in the 5G space, Vi aims to leverage competitive pricing to establish its presence.
5G Pricing Approach: Speaking at Vi’s fiscal first-quarter earnings call, Moondra mentioned that the final decision on 5G pricing will be made closer to the launch. He emphasized that since Vi’s 5G network is still in its early stages, the pricing will reflect this, potentially making it more affordable for customers compared to Jio and Airtel. Both Jio and Airtel have raised their entry-level 5G pricing to increase average revenue per user (ARPU), but Vi may take a different route to attract more users.
Government Stake in Vi: Moondra also addressed concerns about the government’s 23.8% stake in Vi as a public shareholder. He clarified that there has been no engagement or information regarding whether the government plans to retain or gradually divest this stake.
5G Rollout Plans: While specific timelines for the 5G launch were not disclosed, Moondra confirmed that Vi has solidified its 5G rollout plans. The company is actively negotiating with vendors to finalize equipment procurement contracts, with deliveries expected to start in the quarter beginning October 1.
Equipment Replacement: Vi is also addressing potential equipment replacement in regions where it previously deployed gear from Chinese vendors like Huawei. Discussions are ongoing to find the best solution for regions where 5G equipment from Chinese companies is not permitted. These discussions are expected to conclude within a month.
Impact of Recent Tariff Hikes: Moondra noted that the recent tariff hikes have helped improve Vi’s return on investment (RoI) and cash generation. However, he emphasized the need for further tariff adjustments to cover the cost of capital. He expects the increased tariffs to start reflecting in Vi’s revenues over the next two to three months, particularly from prepaid users who have seen an average 17% rate hike.
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