Vodafone-Idea Will Continue To Lose Users In Coming Months: Here's why

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Vodafone-Idea is likely to lose more subscribers in the coming months as Reliance Jio and Airtel have no plans to increase their tariff rates. Vi increased prices of postpaid plans, despite both leading operators are doing well with the same pricing. Besides, both telecom operators don't want to affect their market share.

Vodafone-Idea Will Continue To Lose Users In Coming Months: Here's why

 

Notably, Vi has lost millions of customers as Reliance Jio and Airtel prepaid plans are affordable. These telecom operators also ship better coverages in rural locations. However, India's third-largest telecom operator has been losing subscribers every quarter as none of the telecom operators have increased tariff prices since December 2019.

"A potential slowdown in user adds in the June quarter amid fresh lockdowns could delay tariff hikes by around 3-to-6 months, which would further hurt Vi's precarious financials, widen its losses and lead to more customer losses," Nitin Soni, senior director at the global rating agency, Fitch said.

Airtel And Reliance Jio Not Increasing Tariff Prices

Surprisingly, Reliance Jio and Airtel are not planning to raise tariffs anytime soon as competition between the two is at its peak as the latter is adding more subscribers from several quarters. The active subscribers of Reliance Jio stood at 33. 7 percent, whereas Airtel has a 33.6 percent share, which is why Jio is not increasing prices as this will affect the subscriber base.

This clearly shows that both telecom operators won't take any risk to increase their prices. Additionally, Reliance Jio has managed to achieve only Rs. 138 ARPU in the Q4 FY 21 despite getting Rs. 151 in Q3 of the last financial year.

So, there are no chances that Reliance Jio will increase prices, which seems that Vodafone-Idea is in big trouble. The telecom operator has already increased the prices of postpaid plans and plans to increase the prices of the prepaid packs.

 

It is worth noting that Vi is facing financial issues. The telecom operator is looking for ways to reduce its adjusted gross revenue dues. Furthermore, it is looking for potential investors and plans to raise money from them so that they can invest in their network and improve the quality of the services.

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