Telecom service provider Vodafone India is spending $1 billion to upgrade its network and retail stores.
The company will be testing its 4G LTE network next year. India will see intense competition in the 4G space in 2015 due to aggressive roll out plans of Reliance Jio Infocomm, the 4G venture of RIL (Reliance Industries) promoted by Mukesh Ambani.
A Bloomberg report said Vodafone is betting on surging 2G and 3G data use to drive growth in a market where the average customer spends about $3 a month. Vodafone India ARPU is $3.29 per month.
Vodafone is upgrading its mobile network to ensure better and faster service.
Vodafone India Chief Executive Officer Marten Pieters said that the rollout is being constrained by low revenue and limited wireless spectrum.
India’s second-largest wireless operator is utilizing cash generated from the $130 billion sale of Vodafone Group’s stake in U.S. operator Verizon Wireless to invest in its telecom networks.
Vodafone Group of the U.K. earlier said its Spring Project will focus on driving expansion in emerging telecom markets. Network vendors such as Ericsson, Nokia Networks, etc. are some of the telecom partners of Vodafone to execute the multi-billion Spring Project.
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India, the world’s second-largest mobile market by users, is set to overtake the U.K. as the company’s largest source of revenue.
“If the customer gives me $2 or $3 a month, it’s very difficult for me to build a good network. Where in the rest of the world they get $20, $40, or even $60 or $80 in the U.S,” said Pieters in an interview to Bloomberg on September 26.
Laying new fiber to connect its base stations will drive data demand, Pieters said.
Within two years, Vodafone will double its 3G coverage to cover every service area in India.
The company plans to test 4G LTE technology for the first time next year, Pieters said.
Newbury, England-based Vodafone has 169 million customers in India and posted $6.1 billion in service revenue last year.
The average revenue per user (ARPU) of Vodafone is 203 rupees ($3.29) a month, compared to 202 rupees at Bharti Airtel, India’s largest mobile phone operator, and 181 rupees at Idea Cellular, the No. 3 carrier.
The company’s sales from 3G networks nearly tripled last year and data demand helped the Indian business increase service revenue by 10.3 percent. That compares with a 9.1 percent decline for Europe, where Italy slumped 17 percent and Spain dropped 13 percent.
Low spectrum holdings will constrain growth in data, especially in large cities, Pieters said.
Vodafone has wireless spectrum covering 83 percent of the country. In seven of the company’s service areas, its spectrum allocations are up for auction in February next year.
Baburajan K
[email protected]
