Vodafone Idea (Vi) is preparing to launch its 5G mobile broadband service in March with aggressively priced plans, aiming to recapture market share from established 5G providers Reliance Jio and Bharti Airtel. According to a report in Economic Times (ET), Vodafone-Idea may offer 5G plans at up to 15% cheaper at entry levels — at a sharp discount to current offerings by Reliance Jio and Airtel. According to some leading telco broadband tariff trackers, there may be a 5G data price war in the offing.
Vodafone Idea's initial 5G rollout will reportedly focus on approximately 75 major cities within its 17 priority circles, with specific emphasis on high data consumption industrial hubs. A Vi spokesperson has confirmed the impending launch, stating the company's commitment to providing competitive pricing and the best possible experience. The spokesperson also highlighted Vi’s sufficient 5G spectrum holdings in its priority markets, enabling enhanced 4G coverage and swift 5G deployment in key cities.
Readying 5G gameplan to take on rivals
Beyond discounted plans, Vodafone Idea is also considering increasing its investment in distribution. Industry analysts suggest the company may boost dealer commissions and promotional spending to attract high-value 5G prepaid users from its competitors. While Vodafone Idea did not directly comment on these potential strategies, data from Jefferies indicates that the company already allocates a larger percentage of its sales to dealer commissions (8.4% or ₹3,583 crore in FY24) compared to Jio (3% or ₹3,000 crore) and Airtel (4% or ₹6,000 crore).
Vodafone Idea CEO hinted at affordable pricing
Reliance Jio and Airtel previously implemented tariff hikes in July 2024, raising the minimum cost for accessing their 5G services by requiring users to upgrade to higher-value base plans, a clear attempt to monetize their 5G networks. In contrast, Vodafone Idea CEO Akshaya Moondra hinted that Vodafone Idea's 5G base pricing would be lower than its competitors, with a final decision to be made closer to the launch date. This strategy reflects Vi's urgent need to improve its 4G coverage and introduce 5G in key markets to stem customer losses and compete effectively. By the end of September, Jio and Airtel had amassed 148 million and 105 million pure 5G users, respectively, highlighting the competitive landscape Vodafone Idea is entering.
Halting subscriber losses top priority
While some analysts caution that aggressive undercutting could negatively impact Vodafone Idea's average revenue per user (ARPU) and exacerbate its financial challenges, the company has recently secured ₹24,000 crore in equity funding and anticipates raising an additional ₹25,000 crore in debt following the government's waiver of bank guarantee requirements. This improved financial position gives Vi more flexibility to pursue its aggressive 5G strategy. Most observers agree that Vodafone Idea needs to prioritize halting user losses and then regain subscribers through a combined aggressive 4G and 5G approach.
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