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Vodafone Idea, the country’s largest telecom operator, intends to expand its 4G footprint to cover 80 per cent or a little over 1 billion of India’s population by 2020, even as it is future-proofing every equipment for 5G. The company will continue to operate both the brands — Vodafone and Idea — and will not exit from any market.
“We are committed to expanding our 4G broadband offerings to cover over a billion people by 2020. At present, the company’s two brands together provide 4G coverage to about 50 per cent of total 1.3 billion population,” Vodafone Idea Chief Executive Officer Balesh Sharma said, in his first-ever media interaction after the merger.
Now Vodafone Idea, the largest operator with about 422 million users, intends to cover about 1.04 billion in the next two years. The company also intends to provide data to every customer, as it plans to simplify tariff plans.
Talking about operating both the brands, he said: “The two very complementary and strong brands together will give us the fire-power to take on this hyper-competitive market, across segments and geographies. We can play differential positions with two different brands”.
The company is also well-positioned to compete on the spectrum front, with it having the largest spectrum pool and also the largest liberalised spectrum pool.
Unsustainable market
Vodafone Idea said that the market is “unsustainable” due to aggressive competition and falling Average Revenue Per User (ARPU). The ARPUs, a financial metric for telecom companies, has fallen to about ₹1.4 per user from ₹2.6 about two years ago. “This clearly is very unsustainable. This means the industry cannot invest into ‘Digital India’, which is key to India’s competitiveness in the coming years,” Sharma said, adding there was no clarity on when prices will improve.
On spectrum levies, the company has to pay about ₹3,000 crore (including principal and interest) by March, and ₹12,000 crore more by FY20, Akshaya Moondra, Chief Financial Officer at Vodafone Idea said. The company is also expecting a faster realisation of savings by unlocking “synergies of the merger” worth ₹14,000 crore by FY21 rather than FY23 as earlier estimated. Iit also plans to invest ₹27,000 crore in 2019-20.
The number of towers after merger has come down to 2 lakh from 2.7 lakh earlier, and is expected to reduce to about 1.80 lakh, Sharma said, without providing a time frame.
“Smart network planning and coverage will ensure better network expansion to customers, despite reduction in number of towers,” Sharma added.
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