Vodafone Idea (Vi) is strategically leveraging its delayed entry into India’s 5G ecosystem by embracing the latest network technologies and highlighting its need for a significant tariff correction. The telecom operator, burdened by financial liabilities yet optimistic about its digital future, believes its current position presents both a tactical and cost-effective advantage in India’s fiercely competitive telecom landscape.
Late Entry Allows Adoption of Cost-Efficient 5G Technologies
In an investor presentation submitted to the stock exchanges on April 9, Vodafone Idea outlined how its late 5G rollout has enabled it to deploy advanced network architecture, including Disaggregated Radio Access Network (RAN). This network framework allows the operator to modularise hardware and software components, reducing operational costs, improving scalability, and enhancing the ability to adapt to future service demands.
The company believes this approach will help reduce capital expenditure in the long term, offering a clear cost advantage over earlier deployments. Vi also pointed out that its infrastructure roadmap has been planned to integrate seamlessly with its existing 4G investments, ensuring backward compatibility and operational consistency.
Highlights:
Vi’s delayed 5G rollout allowed adoption of next-gen Disaggregated RAN.
Modular infrastructure enables cost savings and operational flexibility.
Strategic integration with existing 4G network enhances efficiency.
Tariff Hike Stressed as Critical for Long-Term Sustainability
Simultaneously, Vodafone Idea placed strong emphasis on the need for tariff correction. Despite exponential growth in mobile data consumption across India, the average revenue per user (ARPU) has not grown proportionally, the company noted. While usage continues to scale, the economic benefit to telecom providers has not kept pace, placing pressure on margins and network investments.
“There is significant headroom for ARPU growth. Usage has grown multifold, but ARPU has not increased in line,” the company told investors, reinforcing its stance that Indian consumers are now capable of absorbing higher tariffs, especially for enhanced quality and uninterrupted digital services.
Highlights:
ARPU not keeping up with explosive data consumption.
Vi argues that Indian consumers are ready for higher tariffs.
Tariff correction seen as vital to financial health and service continuity.
Revenue Gap with Competitors Highlights Need for Pricing Reform
Vodafone Idea’s ARPU improved to ₹173 in Q3 FY25, up from ₹166 in the previous quarter. However, this remains significantly lower than competitors—Bharti Airtel reported ₹245 while Reliance Jio recorded ₹203.3 in the same quarter. Vi stressed that this disparity underscores the pressing need to reform pricing structures across the industry, and it called for a level-playing field to enable continued investments in infrastructure.
To improve monetisation, Vi is focused on increasing the proportion of high-ARPU users through targeted service improvements and tailored offerings, especially among rural and tier-2 audiences where digital penetration continues to rise.
Highlights:
Vi’s ARPU trails key rivals Airtel and Jio by a wide margin.
Company plans to push high-value subscriber conversion.
Tailored offerings aimed at ARPU enhancement and monetisation.
Expanding 4G and Upgrading 2G Base as Strategic Growth Levers
The company identified migration from 2G to 4G as a crucial growth driver. With a large number of legacy 2G subscribers, Vodafone Idea sees an opportunity to shift this base to 4G and eventually 5G, thereby boosting ARPU. Vi is also working on partnerships with non-banking financial companies (NBFCs) to enable device financing, which will enhance smartphone adoption and support higher data usage.
Additionally, Vodafone Idea said it is focused on customer experience improvements that will help retain existing users and attract premium subscribers. Device bundling, network quality upgrades, and segmented plans are all being explored as part of its strategic roadmap.
Highlights:
Upgrading 2G users to 4G seen as key revenue driver.
NBFC partnerships to promote smartphone financing.
Focus on customer experience to boost high-value user retention.
5G Services Launch in Mumbai, Nationwide Expansion Imminent
In March, Vi commercially launched its 5G services in Mumbai, making a late yet calculated entry into the space more than two years after Bharti Airtel and Reliance Jio. The company has committed to launching 5G in other cities—including Delhi, Bengaluru, Patna, Chandigarh, and Mysuru—by the end of April.
Despite the delay, Vi stated that it has adequate spectrum resources to accommodate future 5G demand. It has earmarked capital expenditure in the range of ₹50,000–₹55,000 crore over three years to support the nationwide rollout and related technology investments.
Highlights:
Commercial 5G launch commenced in Mumbai in March 2025.
Rollouts planned in five additional cities by April-end.
Capex commitment of ₹50,000–₹55,000 crore for three-year period.
Government Stake Rises After Debt Conversion, Eases Liquidity Concerns
In a major financial development, the government recently approved the conversion of spectrum auction dues worth ₹36,950 crore into equity. This move raised the Centre’s stake in Vodafone Idea from 22.6 percent to 48.9 percent, substantially easing the company’s immediate liquidity stress.
The state’s increased holding is expected to instill confidence among lenders and investors, aiding the telco’s ongoing discussions for debt funding and external investments. Vi confirmed that it continues to engage with banks and financial institutions to close funding rounds necessary for long-term network expansion.
Highlights:
Government’s equity stake increased to 48.9% via debt conversion.
₹36,950 crore worth of dues converted into equity.
Facilitates renewed debt funding talks with banks and lenders.
Strategic Enterprise Solutions and Digital Services Drive Future Vision
Beyond consumer mobility, Vodafone Idea is ramping up its enterprise offerings. The operator is strengthening its presence in the B2B segment by offering end-to-end connectivity solutions, especially in the IoT, cloud services, CPaaS, and cybersecurity domains. With India rapidly digitising, the company is positioning itself as a holistic connectivity partner for large corporates and small businesses alike.
Vi plans to enhance its go-to-market strategies with enterprise clients and expand wallet share through bundled solutions, international collaboration via the Vodafone Group, and direct engagements in high-growth verticals.
Highlights:
Enterprise services to include IoT, cloud, cybersecurity, and CPaaS.
Expanding go-to-market strategies for both large and SMB clients.
Vodafone Group’s global expertise to be leveraged for enterprise growth.
Focus on Strategic Collaborations to Unlock Monetisation
The company concluded its investor briefing by underlining the importance of digital partnerships. It is actively pursuing strategic collaborations that could unlock new monetisation models, including device ecosystems, fintech integration, content bundling, and regional OTT partnerships. These efforts are expected to augment Vi’s topline and diversify revenue streams beyond traditional telecom services.
Highlights:
Strategic collaborations in digital monetisation being pursued.
Potential areas include content bundling, fintech, and OTT tie-ups.
Focus on non-traditional telecom revenues for future growth.
