Vodafone Idea’s decision to bundle international roaming (IR) into select prepaid, postpaid and enterprise plans could shift competition in India’s telecom market towards benefit-led premiumisation, with analysts expecting peers to assess customer response before making similar changes.
“In the near term, there may be minor revenue losses for telcos, but we think that with industry subscriber growth largely saturated, all three telcos would want to earn more from existing users, and premiumisation is a way to achieve that,” analysts from Nomura said.
Analysts said the move is primarily aimed at improving retention and attracting or upgrading premium users, rather than competing through headline tariffs.
“We think this move is intended to arrest churn and migrate/attract users into these select buckets and increase the stickiness of the network,” analysts from Morgan Stanley said.
The move changes the way IR is packaged in the market. Roaming has traditionally been sold as a separate add-on, but Vi has made it an in-built benefit on select plans. Its new postpaid plans carry a Rs 50 monthly premium over existing plans and offer up to three international trips a year, while the prepaid benefit is largely restricted to annual plans.
International roaming revenue across Indian telcos generally contributes a small fraction (1-3% globally, though none of the Indian telcos give the breakdown) of total carrier revenue, coming almost exclusively from high-ARPU postpaid and corporate accounts, analysts from Nomura observed.
Analysts noted that since IR contributes only a small proportion of telecom revenue, the more significant market impact could be on customer retention, migration and premium plan positioning rather than the standalone roaming market.
For Bharti Airtel, analysts expect the near-term impact on churn to remain limited because customers on premium plans tend to have higher stickiness.
Morgan Stanley analysts added that the move could, over the medium term, slow incremental subscriber additions for Airtel if Vi succeeds in using IR to attract and retain premium customers. It added that Airtel could introduce competing offers if churn in the segment begins to rise.
“Bharti Airtel’s ~8% postpaid subscriber as a percentage of total vs ~6% for Vi (ex-M2M), implying Bharti is more exposed to IR related revenue loss if bundling becomes an industry norm in the future,” Nomura analysts added. Experts expect Airtel to wait and assess the market response before introducing a similar bundled proposition.
Jio, meanwhile, has comparatively lower exposure to international roaming, with analysts noting that its focus remains mass-market data monetisation and content-led upselling. Analysts therefore see less immediate competitive pressure on Jio from Vi’s move.
The broader impact could be a gradual expansion of bundled benefits as operators compete for high-value customers.