he telecom market in India are going to be “falling into duopoly” with Bharti Airtel and Reliance Jio “sharing the subscriber market share among themselves” if Vodafone Idea does collapse, says Kantipudi Pradeepthi, research analyst at GlobalData. Pradeepthi said that the country till now has the “lower and cheapest mobile data plans round the globe” largely “due to the launch of Jio in 2016.” The research analyst at GlobalData believes that “there might be an opportunity for a rise in tariffs within the mobile plans by these remaining two players” if Vodafone Idea does pack up its operations.

Vodafone Idea Survival Crucial for India

Pradeepthi highlighted that Airtel has already tweaked its postpaid plans for its enterprise users in July. The GlobalData research analyst said that the second largest operator in India also “adjusted offers to retail customers so as to influence them to upgrade to higher-priced plans.”

“The primary objective is to enhance average revenue per user (ARPU),” Pradeepthi, research analyst, telecoms market data and intelligence at GlobalData, told TelecomTalk in an email interview. “It is crucial for Vi to be in [the] market to take care of healthy competition, availability of options for subscribers to settle on from, and avoid duopoly.”

In mid-August, Vodafone Idea, the third-largest wireless operator in India, announced its first-quarter results, with the operator recording a 4.7% decline in its quarter-on-quarter revenues. Ravinder Takkar, chief military officer at Vodafone Idea within the first-quarter earnings call, said that the operator has continued to “remain in active discussions with potential investors” for fundraising. Additionally, Takkar also said that the hike in tariffs “remains critical to revive the sector” which the ground pricing is “critical and necessary to enhance the general health of the industry.”

Crucially, the CEO at Vodafone Idea highlighted that its 4G coverage has “already crossed the benchmark of 1 billion Indians” within the past year.

“The fallout of Vi could overburden Airtel and Jio,” Pradeepthi said. “There may be a higher chance towards Airtel as Jio has only 4G infrastructure. We believe that there might be an opportunity of additional investment by these two players to expand the Indian telecom infrastructure for accommodating Vi customers.”

JioPhone Next to Accelerate Switch to Smartphones

GlobalData, during a report in late April, said that the mobile data service revenue is about to record a 14.7% compound annual rate of growth between 2020 to 2025. the info and analytics company said that the mobile data service revenues are “expected” to extend from US$6.3 billion in 2020 to US$12.5 billion in 2025. GlobalData highlighted that the rise in mobile data service revenue would largely be “driven by the continued rise in smartphone subscriptions and therefore the subsequent surge in mobile data consumption.”

With Jio scheduled to launch its JioPhone Next in early September, Pradeepthi said that the operator would release its smartphone with “free data plans” to “undercut the competition.”

“We believe that the strategy will hasten the transition from feature phones to smartphones, allowing more Indians to access the web ,” Pradeepthi said.

According to the report released by GlobalData in April, the penetration of mobile internet subscriptions will rise from an “estimated” 47.3% in 2020 to 81.4% by the top of 2025. The firm said that the rise is thanks to the “heavy investment in telecom network development across remote areas within the country.”

It was also said that Reliance Jio would “retain its leading position through 2025” which the 2G subscription share will decline to three .5% by the top of 2025 from 36.5% in 2020.

“With reference to 2G network, Airtel maintains that 2G services are generating significant revenues, and it doesn’t decide to pack up its 2G networks within the near future,” Pradeepthi said. “However, the transition of 2G users to 4G services will certainly gain momentum with the supply of affordable 4G smartphones.”

Additionally, the report said that the monthly data usage on the average would rise from 9.2GB in 2020 to 14.7GB in 2025. The firm said that the rise within the monthly data usage would be driven by the “consumption of bandwidth-heavy services like mobile video and social media on the mobile network.”

“With the approaching launch of the low-cost smartphone, Jio is expecting to trigger the upgradation of India’s over 400 million 2G users to 4G network, especially in rural areas where Jio has already been investing within the expansion of 4G network coverage,” Pradeepthi said.