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Telcos wooing postpaid customers, will hurt Vi since the telco leads

Bharti Airtel and Reliance Jio are competing for Vodafone Idea’s postpaid customer base in the international roaming services sector.

Vodafone Idea, also known as Vi, has been facing financial troubles and striving to retain its customers. According to data released by the Telecom Regulatory Authority of India (Trai), Vi lost 1.21 million wireless users during the month of March and its mobile subscriber base decreased to 236.7 million in March from 237.9 million in the previous month.

On the other hand, Reliance Jio added 3.05 million mobile subscribers in March, continuing its momentum from February and Bharti Airtel added 1.037 million mobile subscribers in March, bringing its total subscriber base to 370.9 million, compared to 369.8 million in February.

On May 25, Vi also reported a consolidated net loss of Rs 6,418 crore in the fourth quarter of the financial year that ended in March 2023, compared to the same period the previous year, primarily due to an increase in operating expenses. The net loss was 2.2 per cent lower compared to the previous year, thanks to revenue growth and an increase in 4G customers.

In recent months, both Airtel and Jio have introduced competitively priced international roaming packages that emphasise affordability, convenience, and flexibility. Airtel has introduced a single travel pack that covers 184 countries, while Jio offers features like in-flight calling and data packs for international travelers.

In response, Vi has recently announced unlimited international roaming packs in 29 countries, including popular travel destinations such as the US, UK, Thailand, Italy, UAE, Australia, and Singapore. They have also introduced unlimited international roaming plans for their prepaid customers.

Compared to its competitors, Vodafone Idea has had a stronger hold on its postpaid customer base and boasts a larger share of postpaid customers compared to its competitors. According to estimates report, less than five per cent of Jio’s 430 million user base consists of postpaid customers, while for Airtel, roughly six per cent of its current customer base is postpaid. In contrast, nearly 10 per cent of Vodafone Idea’s subscriber base is postpaid.

A report by CRISIL Ratings in April estimated that the total postpaid subscriber base in India would increase by 12 per cent in the financial year 2023. This was due to the recalibration of tariffs, unlimited 5G data, a wider range of over-the-top (OTT) content and the narrowing down of the gap between postpaid and prepaid ARPU, stated the report.

The report also showed that postpaid subscriber numbers have increased by about 300 basis points or eight per cent in the last two years after staying stagnant between 2017 and 2021. Business Standard

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