Vodafone Idea (Vi), the struggling Indian telecom operator, is trying to entice users from porting out or just experiencing its service once more time by dolling out free data to users without any active plan. Users across the country have received free data from Vi when they have not recharged their SIM or number with any plan. To ensure that these users don’t port out and keep using the SIM, Vi is giving them free data at regular intervals. But this is doing more harm for the telco than any good. The inactive users are not recharging, so regardless of whether they stay in the network of the telco or not doesn’t create a difference in the company’s financial performance. But Vi is making them stay by giving free data because it doesn’t want its subscriber churn rate to go higher than where it already is.
One other reason could be that Vodafone idea wants inactive users to use its free data and be active base. Both reasons could be true. When TelecomTalk reached out to Vi asking about why the free data was given out, the telco didn’t give any response.
Along with the free data, the telco is also offering free voice calls now. Vodafone Idea has been trying to get the attention of its active users for a long time, and this is how the telco is doing it.
Vodafone Idea is Hurting its Own Business
While it is good for the consumer at the end of the day, the telco isn’t really benefiting from it. If you zoom out a little and look at the bigger picture, Vi is actually indirectly promoting its users not to recharge. If you can get free data and voice calls, why would you recharge? Vi keeps on offering the free data benefit at regular intervals to users without active plans or usage.
This would just push the other users not to recharge as well. People can just keep the Vodafone idea SIM as the secondary option, with the primary being of Airtel/Jio/BSNL and then just recharge the primary SIM and keep getting data services in the secondary Vi SIM as well. This would just crush the already struggling business of Vodafone Idea.
Honestly, offering free data is not a good strategy for the operator. The telco should instead focus on increasing average revenue per user (ARPU) by maximising revenues from active subscribers. Vi’s ARPU is currently the lowest in the whole industry, and that needs to go up significantly for the operator to be able to make enough money to sustain. But despite lucrative offerings from Vodafone Idea, its data and voice volumes show us that users are not interested in the quality offered by Vi.
A prepaid tariff hike should change things for the operator in the ARPU department. But even then, Vi would need to add in more 4G users and try to get them to pay for the most expensive plans. Vi has been offering the most heavily loaded data plans to keep an edge over the services of Airtel and Jio. But it clearly hasn’t worked out. Users don’t want just more data; they want a good experience. To retain subscribers, the telco has indirectly reduced tariff in both prepaid and postpaid segments and that is not helping it either.
The telco still hasn’t rolled out VoWi-Fi services in all circles of the nation and its voice services remain patchy. There are a lot of gaps that Vi needs to fill within its business. But giving out free data to inactive users isn’t the way to do it.