Vodafone Idea shares surge nearly 5% on 5G rollout in Mumbai

Shares of Vodafone Idea (Vi) gained almost 5 per cent in early trade on March 19 after the telecom giant announced the launch of its 5G services in Mumbai.

"With this rollout, Vodafone Idea is set to enhance mobile experience with widespread coverage at competitive pricing," the company's exchange filing stated.

The telecom major highlighted that its 5G rollout will leverage next-generation equipment through a partnership with Nokia. The network is designed to be leaner and more energy-efficient, promoting sustainability, it said.

Vi has also deployed an AI-powered Self-Organizing Network (SON) system, which continuously optimises network performance for a superior consumer experience.

To attract customers, Vi has introduced an introductory offer with unlimited 5G data for plans starting at ₹299, making it one of the most competitively priced options in the market. The service aims to improve user experiences in streaming, gaming, video calls, and downloads.

However, despite this rollout, Vi still lags behind peers like Reliance Jio and Bharti Airtel, both of which have already completed their pan-India 5G deployment.

Financials and Expansion Plans

In the past 12 months, Vodafone Idea has raised approximately ₹26,000 crore in equity, including India's largest follow-on public offering (FPO) of ₹18,000 crore and a promoter contribution of around ₹4,000 crore. This capital infusion is enabling the company to accelerate its capital expenditure (capex) plans.

Vi plans to invest ₹50,000-55,000 crore over the next three years, aiming to expand its 4G network coverage to reach approximately 90 per cent of the Indian population. The company is also prioritizing 5G rollouts in key regions to enhance customer experience.

Commenting on the launch, Jagbir Singh, CTO of Vodafone Idea, said, “Our focus is on introducing 5G meaningfully for our users. We have invested in building a robust 5G network by deploying the latest technology. By expanding our infrastructure, we are delivering a network that is ready for the future—seamless, powerful, and built for modern connectivity demands.”

Stock Performance

Following the 5G launch announcement, Vi shares surged as much as 4.7 per cent to ₹7.44 in morning deals on Wednesday. Despite the rally, the telecom stock remains over 61 per cent below its 52-week high of ₹19.15, recorded in June 2024. However, it has gained nearly 13 per cent from its 52-week low of ₹6.6, touched in November 2024.

So far in 2025, Vodafone Idea shares have declined 11 per cent. Over the past year, the stock has lost 45 per cent of its market value.

MOFSL's Cautious Outlook

Despite the 5G rollout, brokerage firm Motilal Oswal Financial Services (MOFSL) expressed concerns over Vi's long-term competitiveness. In a March 17 note, the brokerage stated that Vi is unlikely to gain substantial market share, even with its large capex plans.

MOFSL believes Reliance Jio and Bharti Airtel are better positioned to capture market share, given their stronger financial capabilities and superior free cash flow (FCF) generation. The brokerage continues to prefer Bharti Airtel and Reliance Industries (RIL) in the telecom space.

Regarding recent tariff hikes, MOFSL highlighted divergent trends. It noted that Bharti Airtel has been the biggest beneficiary of the July 2024 tariff hikes, while Jio is expected to see delayed benefits due to a larger portion of its subscribers being on longer-duration plans.

MOFSL expects one more tariff hike in December 2025, building in a 15 percent increase. The brokerage believes telecom operators may need to shift towards usage-linked pricing models to sustain average revenue per user (ARPU) growth beyond FY27.

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