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Free Data Offer Prompts Vodafone Upgrades To 4G Devices

By Darien Cavanaugh
Published on: 19:52 PST, Nov 22, 2016

A free data offer from Vodafone is prompting upgrades to the companies new 4G network.

Vodafone India, the nation’s second largest telecom provider, announced Tuesday that it would provide two GB of free data to any current customer who upgrades to a 4G SIM for the first time, according to a report from The Economic Times of India.

“We are offering 2GB data free for our customers to experience the benefits of Vodafone SuperNet 4G and to enjoy unparalleled mobile internet services,” Pushpinder Singh Gujral, a Vodafone representative, told the Times.

The offer comes at a time when wireless service providers in India are “operating amidst cut-throat competition,” the Times notes.

The market has become particularly competitive since Mumbai’s Reliance Jio, which often does business simply as Jio, launched affordable 4G service in September.

“India’s richest man has promised to shake up the country’s booming smartphone market with cut-price 4G services that aim to bring tens of millions of Indians online,” The Guardian‘s Michael Safi wrote of Jio’s 4G launch at the time. “Mukesh Ambani’s Reliance Jio network officially launched on Monday offering customers three months of free services followed by free calls and data plans it claims are the world’s cheapest, some charging 50 rupees, or 56p, per gigabyte.”

Fifty rupees currently converts to roughly 73 U.S. cents.

“Jio has already sparked a price war in a market that recently hit one billion mobile phone users, and which is expected to double its number of internet users to 730m within four years,” Safi noted, adding that Ambani told Reuters “Data is the new oil, and intelligent data is the new petrol,” back in March.

Vodafone India is a subsidiary of Vodafone Group, a multinational telecommunications firm based out of London. According to the Vodafone Group’s website, the company conducted “the first ever mobile call in the UK on January 1, 1985.” Vodafone now boasts 400 million customers worldwide.

Vodafone announced on November 15 that the increased competition in India had indeed taken a toll on its profits there.

“Competition in India has increased in the year, reducing revenue growth and profitability,” reads a statement from the company. “We have responded to this changing competitive environment by strengthening our data and voice commercial offers and by focusing our participation in the recent spectrum auction on acquiring frequencies in the more successful and profitable areas of the country.”

The phrase “reducing revenue growth and profitability” might be a bit of an understatement. According to Vodafone’s own review, the changing market in India contributed to reducing the carrying value of Vodafone India by roughly half a billion Euros during the most recent six-month cycle.

“Six months ended September 30, 2016 includes a gross impairment charge of €6,375 million (2015: €nil) recorded in respect of the Group’s investment in India, which together with the recognition of an associated €1,375 million deferred tax asset, led to an overall €5.0 billion reduction in the carrying value of Vodafone India,” the statement from November 15 concludes in regards to Vodafone India.

The free data offer is one step Vodafone is taking to try to recoup some of its profitability in India.

There is one additional stipulation for the free data from Vodafone, in terms of pre-paid customers versus those who are billed.

Prepaid customers will only have 10 days to use the free data. Billed customers will have until their next billing date to use the data.

With Reliance Jio so focused on undercutting competitors’ prices, things could remain dicey for wireless service providers in India for some time to come. That’s despite the growing market and the offers of free data and other incentives.

[Featured Image by Ralph Orlowski/Getty Images]

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