Vodafone Idea to Struggle With 5G Because of Weakening Customer Base: GlobalData

All the private telcos in India have been working for the last year to develop 5G use cases and prove their network is ready to handle higher data loads and capacity for enterprises and consumers. Vodafone Idea (Vi), the third-largest telco in the country, is, however, not in the right position to invest heavily in the 5G spectrum auction.

GlobalData, a data analytics firm (via ET Telecom), said Vodafone Idea is likely to struggle with 5G because of poor performance in the financial department as well as a weakening customer base.

Priya Toppo, an analyst at GlobalData, said that while Airtel is already testing 5G equipment, the question will remain over whether the telco can afford to build 5G meaningfully. As for Jio, Toppo said that it would be easy for the telco to gain a market-leading position because of the massive financial resources and existing market position.

Toppo said Vodafone Idea is likely to struggle due to its weakening customer base and financial position.

Bulk of Indian Customers to Continue Using 4G Services

GlobalData estimates that a bulk of the customers in India will continue to use 4G services due to the rising data prices and smartphone prices, particularly in rural areas. However, at the same time, the data analytics firms said that India’s mobile data usage would grow by 29%, and data revenue would go up by 67% between 2020 and 2026 because of 5G broadband.

This is in line with the data that Ericsson has previously shared on its Mobility report. Ericsson estimates that most consumers will continue to use 4G in the coming years, and 5G will only become slightly dominant around 2027.

Most of the parties that adopt 5G services would be enterprise customers in different verticals such as healthcare, fintech, agritech, and more.

It is interesting to note that Reuters recently said, citing industry sources, that the telcos are looking to not invest heavily in the upcoming 5G spectrum auction. If there’s a delayed or minimal rollout of 5G by the Indian telcos, it might even take longer for India to become a nation with most users consuming 5G services.

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