Spectrum re-farming likely to help Vi in shoring up revenues

Vodafone Idea Ltd (Vi) has been re-farming its older-generation (2G-3G) spectrum to fourth-generation (4G) wireless technology, which could shore up its revenues by reducing fixed costs and improving services, analysts said.

The telco recently completed re-farming of 3G spectrum to 4G across Mumbai and promised to deliver high-speed internet and better indoor coverage. Mumbai is one of the three metro telecom circles, apart from Delhi and Kolkata. Analysts said the redeployment will not only help Vi save on capital spending but will also help it retain customers because of improved services.

Vi lost 2.7 million customers in October, and its average revenue per user (Arpu) remained the lowest among the three largest telecom players. Its Arpu rose to ₹119 in the September quarter from ₹114 in April-June. Vi seeks to raise Arpu to ₹200 in the short-term and ₹300 eventually. Though Vi and rival Bharti Airtel Ltd initiated the process of upgrading their networks to 4G even before the pandemic, covid-led restrictions, which led to increased dependency on mobile services, led to faster realization of spectrum re-farming plans.