The Future Of Vodafone-idea: What’s Ahead?
Vodafone India is the Indian subsidiary of British telecommunications operator Vodafone Group plc. Its operational head office is in Mumbai. Vodafone has been operational in India for a long. According to CEO Nick Read, the future of Vodafone in India is reeling.
India’s telecom industry has moved forward in leaps and bounds in the last few years, thanks to the nationwide availability of 4G. With hundreds of millions of users, India should be teeming with companies. However, that is not so.
India’s telecommunication industry has only three players left now, thanks to Jio’s assault in 2016- Vodafone-Idea, Jio, and Airtel with Jio being the largest operator with 330 million users.
● High Operating Rates
According to ETV News Today, one of the problems of Vodafone-Idea’s unstable condition in India is the exorbitant rates. According to October 2018, their share was listed as Rs. 23.41. Today it has come to Rs. 5.55. Investors have lost nearly 50 percent of their investment in 5 months.
Vodafone’s strategy to face off with Jio was to merge with Idea, but sadly, it has led the company to lose 14 million subscribers, making the total loss in the past year to a total of 115 million users.
● 4G
The merger failed in its function. ETV Bharat Breaking News highlights Vodafone and Idea with a combined debt of more than Rs. 1 lakh crore with their ARPU (Average Revenue Per User) being the lowest at Rs. 108, whereas Jio and Airtel sport an ARPU of Rs. 124 and Rs. 129 respectively.
Vodafone and Idea’s merger has not been easy. Multiple outages, frequent call drops, slow data transfers, and poor coverage have been the repeated complaints, whereas Jio had been supplying with VoLTE (voice over LTE).
In comparison, Airtel had been playing a different game. Instead of trying to increase its user base, it has been trying to improve its ARPU. Currently, Airtel is in the lead with an average download speed of 8.7 Mbps, with Jio in second place with a download speed of 6.3 Mbps. Vodafone and Idea separately were at 5.9 and 5.4 Mbps, respectively.
● Why doesn’t Vodafone-Idea try to improve itself?
Huge crippling debt and lack of working capital have prevented the company from improving itself. In an attempt of self-preservation, the company has hinted that it will curb the expenses, as any more would push the company over the fence into crisis. However, this decision is hurting subscribers.
● Probable Resolution
Right now, Vodafone-Idea needs a lot of money to pay off its debts, and there are two ways to achieve that. Either by selling its 11.15 percent stake in Indus Towers. This is supposed to complete in the next few months and could give an amount of around Rs. 6000 crores. The other option is if the government showed some mercy, as most of the company’s debt is to the government.
