At a time when Reliance Jio and Bharti Airtel are competing for higher subscriber base, Vodafone Idea has been losing market share largely due to weak capital expenditure especially on the network, delay in the launch of 5G services, shift of lower-end subscribers to other operators, lucrative offerings by the competition in some segments, among others, according to analysts.

In January, the company lost its market share in 17 out of 22 circles, according to data by the Telecom Regulatory Authority of India (Trai). In fact, for the last one year till January end, the company has been losing its market share in these circles, which is also evident from the continuous decline in the overall subscriber base.

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In Kerala, Vodafone Idea currently has the highest market share of 34.4% among all telecom operators and the same was 37% at the end of January 2022. In Andhra Pradesh, Vodafone Idea had 16.8% share as of January 2022, it is now reduced to 14.5% as of January 2023. Similarly, there are other key circles where the company has been losing market share continuously.

Barring 17 circles where the company has lost subscribers, the five circles where the company has either gained or has a stable market share are: Himachal Pradesh, UP (West), UP (East), North East, and Madhya Pradesh.

As of January end, the company has an overall market share of 21%, down from 23.2% in the year-ago period. In January, the company has lost about 1.36 million wireless subcribers. For the straight 22nd month, Vodafone Idea has lost 43.75 million subscribers.

“We expect Bharti and RJio’s market share gains to accelerate at Vi’s (Vodafone Idea’s) expense, especially among premium subscribers, driven by pan-India 5G rollouts, and Vi’s cash constraints, long-delayed fund-raise and uncertainty on 5G launch,” said Kotak Institutional Equities in a report. “Further, a delay in the tariff hikes could lead the sector to an effective duopoly,” the report said.

While experts believe that 5G monetisation is still far, Airtel and Jio have covered close to 500 cities and towns in the country with their 5G networks. On the other hand, Vodafone Idea is currently dependent on fundraise to repay its debt and launch 5G services.

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“5G rollout has been considered as part of our overall capex plan and we continue to work towards rolling out 5G for our consumers which can be executed quickly once funding is in place,” said Akshaya Moondra, CEO of Vodafone Idea during the October-December quarter earnings call. “In the meantime, we have live 5G clusters in Delhi and Pune where we have partnered with various OEMs to test compatibility of available 5G handsets. Further, we are in advanced stages of discussion with various network vendors for finalisation of our 5G rollout strategy,” Moondra had said.

Owing to delay in the 5G launch, analysts believe that the company would start losing its premium customers to competition. “Even as the two larger operators maintain their focus on 5G rollouts, the key trigger remains the quantum and timeline of tariff hikes. For VIL, the situation continues to be dire and a sizable fund-raising is required at the earliest,” Emkay Global said in a note.

With regard to active subscribers, the company’s total active subscribers fell for the tenth straight month in January. Vodafone Idea’s active subscriber base fell by 0.46 million to 209.13 million.

“Vodafone Idea active subscribers continuing the declining trend over the past many months due to churn in the lower Arpu segments given the entry-level prepaid tariff hikes undertaken in July 2021 and November 2021,” said brokerage house JM Financial. “Notwithstanding the moratoriums and recent tariff hikes, VIL needs to close the fund-raise exercise quickly for a meaningful increase in capex to boost upgrade of customers to MBB (mobile broadband),” the brokerage added.

In January, the total number of active mobile users across all operators rose by 3.97 million. Of the total 1.143 billion wireless subscribers, 1.024 bln or 89.66% were active, according to the peak visitor location register, which shows the number of active subscribers, including those roaming on a mobile operator’s network.

While Vodafone Idea has been facing a weakness in its subscriber base, the silver lining is that its 4G subscriber additions in January were the highest in eight months. During the month, the telecom operator added nearly 1.2 million 4G subscribers.

The company attributed the reason for 4G subscriber additions to its range of offerings through partnerships. The company said, its prepaid and postpaid plans are best in value.