Vodafone Idea is significantly enhancing its network capacity and coverage across India. Following a recent fundraising drive, the company aims to expand its network capacity by 15% to better serve its growing customer base. Despite this progress, Vodafone Idea CEO Akshaya Moondra highlights key challenges in adopting and monetizing 5G technology.
5G Monetization Challenges
Moondra addressed the complexities surrounding 5G monetization during a recent investor call discussing the company’s first-quarter fiscal 2025 results. Moondra noted that while 5G traffic is growing, this growth is currently being seen in a context where 5G service is free. Moondra said that because 5G traffic is being provided for free, it is not currently metered, and the real challenges will become apparent when telecommunications companies start charging for 5G service.
5G monetization key points:
- Increased data consumptionMoondra explained that 5G users often consume more data, especially with streaming services, without a corresponding improvement in user experience. This situation is manageable while data is free, but becomes problematic when users are charged based on data usage.
- Consumer ChoiceWith 5G resulting in a three-fold increase in data consumption compared to 4G, users will be faced with a choice as to whether the enhanced experience justifies the higher costs associated with 5G.
Investment and network expansion
Vodafone Idea is not just focused on 5G, but also on strengthening its existing 4G network. The company has been investing to expand its network capacity by 15% and improve coverage with the introduction of the L900 band. The expansion is aimed at improving indoor coverage and overall network performance in various circles.
Strategic Investments:
- 5G InfrastructureVodafone Idea plans to continue investing in 5G infrastructure given the potential benefits in terms of capacity and service quality, but Moondra stressed that the company will need to balance its investments in 4G and 5G depending on the availability of 5G devices and the actual migration of traffic from 4G to 5G.
- Device AvailabilityThe availability of 5G-capable devices will be a key factor in determining the extent to which 5G will impact network capacity and usage patterns.
Future outlook
Moondra concluded that 5G remains a promising solution to network capacity challenges. Vodafone Idea’s strategy is to continue investing in both 4G and 5G technologies, with a focus on adapting to the dynamic nature of network demand and device availability.
