• India’s mobile market leaders, Reliance Jio and Bharti Airtel, have had the 5G services market to themselves so far
• But the market dynamics are set to shift as a revitalised Vodafone Idea (Vi) prepares its 5G launch for March 2025  
• Vodafone Idea’s entry may lead to tariff innovation and further investments by Jio and Airtel as they seek to prevent churn 

NEW DELHI – India Mobile Congress 2024 (IMC24) – Having given its main rivals a two-year head start, India’s third-largest service provider, Vodafone Idea (Vi), is set to launch its commercial 5G services in March 2025, a move that will further intensify competition in the mobile services sector and fuel a new wave of digital infrastructure investments. 

India’s mobile market leaders, Reliance Jio and Bharti Airtel, launched their 5G services in late 2022 and invested tens of billions of dollars in their networks to speedily build out national 5G coverage: Jio has about 148 million 5G customers while Airtel has more than 90 million though, as we reported yesterday, monetising 5G in a market with low average revenue per user (ARPU) levels is proving a challenge – see India’s Airtel eyes consumer sector for 5G monetisation.

Now the country’s third main privately owned network operator, Vi, is set to enter the fray, though a little later than originally intended: Earlier this year, the operator’s CEO, Akshaya Moondra, mentioned that Vi was planning to launch commercial 5G services by the end of this calendar year, but that launch has now been put back a few months to March 2025, reports The Economic Times.

That timeframe will give Vi time to work with its vendor partners to deploy its 5G technology: Vi recently awarded $3.6bn worth of deals to Ericsson, Samsung, and Nokia to improve 4G coverage and roll out 5G. According to recent media reports, Vodafone Idea plans to deploy 75,000 5G sites over the next three years. While it will likely start with metropolitan cities, the service provider is prioritising 5G in 17 circles (service areas). 

The entry of the third service provider will change the dynamics of the industry. Jio and Airtel already have a significant advantage over Vi in terms of coverage and developing their 5G customer bases – by the time Vi launches, the market leaders will have been promoting their 5G services for two-and-a-half years and, it seems, they will have invested further in their 5G networks to enhance coverage and capacity in order to improve the 5G customer experience. 

As a late entrant, Vi will undoubtedly seek to gain market share by offering its 5G services at lower rates than Jio and Airtel, just at a time when the mobile operators are looking to boost their revenues and return-on-investment opportunities through “tariff repair” (another way of saying price increases).

“Despite the delayed rollout compared to its rivals, Vi’s 5G launch promises to intensify competition, especially as the company will likely aim for price-sensitive customers,” said Arun Menon, principal analyst at MTN Consulting. “Nevertheless, Vi has an opportunity to differentiate itself. Its delayed entry allows it to potentially adopt newer 5G technology at lower costs, positioning itself as a cost-effective alternative,” added Menon.

Will it lead to more investment by established players to prevent churn? In addition, Vi’s entry in the 5G sector looks set to push the established players to invest further in their 5G network infrastructure to prevent the potential of churn. “Vi’s legacy customer base in semi-urban and rural areas, combined with a competitive 5G offering, could lure value-conscious customers away, creating a risk of churn for the established players. To mitigate this threat, Airtel and Jio might intensify their investments in 5G infrastructure in rural and semi-urban regions, aiming for broader coverage and improved network performance,” elaborated Menon.

Interestingly, media reports suggest that Airtel, which is focusing on the consumer segment for 5G monetisation, is about to award multi-year contracts worth more than $2bn to Nokia, Ericsson and Samsung to improve its coverage. 

Meanwhile, Vi’s new investments are as much about 4G as 5G: It aims to improve 4G coverage in rural areas by 15% to 16%. This is mainly because the service provider needs to reduce the customer churn that has led to a gradual erosion of its customer base in recent times. Vi’s market share has dropped from 19.92% in July 2023 to 18.46% in July 2024, according to data shared by the Telecom Regulatory Authority of India (TRAI).

 “While Vi’s 5G launch will heighten competition, Airtel and Jio’s strong networks and initial advantages will likely lead them to focus on growing their user bases and monetising 5G services more aggressively. Vi, meanwhile, will need to play catchup quickly to avoid being further marginalised in a market already being shaped by the early movers,” noted MTN Consulting’s Menon.

– Gagandeep Kaur, contributing editor, TelecomTV