Vodaphone(analysis)

• 

Introduction

Vodafone Idea Limited is an Aditya Birla Group and Vodafone Group partnership. The Company provides pan India Voice and Data services across 2G, 3G and 4G platform. With the large spectrum portfolio to support the growing demand for data and voice, the company is committed to deliver delightful customer experiences and contribute towards creating a truly ‘Digital India’ by enabling millions of citizens to connect and build a better tomorrow. They use the power of technology to enhance our customer’s lives – through ubiquitous presence and connectivity through our PAN India urban and rural coverage, a continuously expanding 4G LTE network, integrated worry free propositions and some of the best entertainment on mobile – all packaged into a completely unmatched customer experience.

There innovative and truly differentiated offerings – be it our Prepaid Unlimited propositions, RED Postpaid plans, Truly Unlimited International Roaming products and many others – reflect the passion with which we aim to serve our customers, always!

Company analysis :

1. With a subscriber base of nearly 1058.86 million, as of March 2016, India accounted for the second – largest telecom network in the world. The subscriber base has expanded at a compounded annual growth rate (CAGR) of 19.96% during FY 07–16.

2. With 462.12 million internet subscriptions, as of July 2016, India stood third-highest in terms of total internet users in 2016.

3. Since 2012, the share of time spent on watching videos on mobile devices has grown by 200 hours a year.

4. As of March 2016, urban tele-density stood at 154.01% and rural tele-density at 51.37%.As of March 2016, Bharti Airtel was the market leader, with a 24.31% share in the total subscription, followed by Vodafone (19.15% share).

6. The top five players in the sector include – Bharti Airtel, Vodafone, Idea, Reliance, and BSNL – accounting for 78.74% of the total subscribers in the country.

7. BSNL is the market leader with a 60.28% share, followed by MTNL (13.60%); BSNL, MTNL, and Bharti together account for 87.46% of the total fixed-line market.

Vodafone Idea ( Professionally Managed)

Reasons:

1. To Handle the Rising Dominance of Reliance Jio in the Telecom Industry:

 The main reason for the Vodafone-Idea merger is to Handel the rising dominance of Reliance Jio in the Telecom industry. As Jio announced to provide free services in the first 6 months. As a result, it started to capture the maximum part of the market.

2. Price War:

 The free services from the Jio started the price war between the companies in the telecom sector.

3. . Merger Brings Confidence:

 As a result in case of a price war merger brings confidence in companies with synergy benefits. Shareholders will benefit if a company’s post-merger share price increases due to the synergistic effect of the deal. The expected synergy achieved through the merger can be attributed to various factors, such as increased revenues, combined talent and technology, and cost reduction.

4. Expected To Hold A Strong Position In The Industry: Such as in some circles it became the largest cellular service provider and in some circle, it was the second-largest after Bharti Airtel. So, a joined company can focus on being the service provider.

Functioning and working Of Top-level Management:

1. Managing Director & Chief Executive Officer – Ravindra Takkar

 i) He has been closely associated with the growth and evolution of Indian telecom since Vodafone Group‘s entry in 2007. He held a number of senior roles in Strategy and Business Development and was also the CEO of Vodafone Enterprise business in India.

 ii) In addition to his responsibilities at Vodafone Idea, Ravinder also serves as Director on the boards of Indus Towers Limited, Cable & Wireless Global (India) Private Limited and Vodafone India Services Private Limited.

2. Chief Financial officer – Akshaya Moondra

 i) A member of the National Leadership Team, he is responsible for arranging and managing company finances, capital allocation, statutory and management reporting, budgetary and internal controls, revenue assurance, strategic business finance, investor relations, secretarial and other compliances

 ii) Ranked as the Top CFO in Indian listed companies across sectors for 2016 by Finance Asia and amongst Top 3 CFOs in Asia in Telecom Sector by Institutional Investor for 3-years, Akshaya joined telecom after spending over two decades in various Aditya Birla Group companies – Grasim Industries, South East Pulp, Thai Rayon, Thai Epoxy and Allied Products and Thai Acrylic Fibre.

3. Chief Operating Officer – Ambrish Jain

 i) Ambrish Jain is the Chief Operations Officer of Vodafone Idea Limited, India’s largest telecom service provider, effective 31st August 2018.

ii) A member of the National Leadership Team, he drives pan-India circle Operations and Service Delivery.

4. Chief Regulatory & Corporate Affairs Officer – P. Balaji

i) A member of the National Leadership Team, Balaji leads the company’s Regulatory, Public Policy and Government

Relations activities along with Industry advocacy, Corporate Communications, Reputation Management and CSR.

ii) Prior to his present role, Balaji was the Director –Regulatory, External Affairs and CSR at Vodafone India. He was responsible for leading the company’s Regulatory, Public Policy & Government Relations activities and also the External Affairs function overseeing Corporate Communications, Reputation Management and administering Corporate Social Responsibility and the Vodafone Foundation in India.

5. Chief Commercial Officer – Rajesh Shrivastav

i) A member of the National Leadership Team, Rajesh leads all activities related to the company’s Capex and Opex spends, and all Supply Chain aspects including Procurement, Contracting, Warehousing/Logistics, Inventory Management etc.

ii) Prior to his present role, Rajesh was the Chief Commercial Officer at Idea Cellular where he was instrumental in procuring world class equipment for Network, IT and Services including Towers, Sales/Marketing and Service Delivery requirements.

6. Chief Marketing Officer – Avneesh Khosla

i) As the CMO, he spearheads the company’s consumer initiatives and is focussed on building a strong franchise for Brand Vi – India’s newest telecom brand, born out of the world’s largest network integration.

ii) At Vodafone Idea, Avneesh is spearheading key strategic agendas around driving a strong business transformation through a digital first approach.

What Can Be Done To Fix The striking problems, some of the steps are mentioned below:

Payment of Debt:

● vodafone idea owes a huge amount of debt to the government in form of spectrum payment the only way out for it from this crisis is to pay the huge sums of money they owe. Not only is it hindering its ability to invest in new projects but it also reducing its credibility because of which firms and public are afraid of wasting money in their company.

● There could be some relief if the government decides to save the distressed telco by extending the moratorium on spectrum-related payments. After all, a majority of the company’s debt is owed to the government for spectrum.

Raising Funds From Reliable Sources:

● Vodafone idea is in dire need of funds to boost their sluggish operations and to invest in new infrastructure. Investing in new infrastructure would help Vi to compete with its competitors Bharti Airtel and Jio who has been investing intensely in new infrastructure to gain more subscribers. Recently there were news about Vi planning to raise 6000 crores but failed to do it. Now it need to raise huge amounts of funds from both internal and foreign sources so that it repays its debt and invest in new infrastructure.

Providing New Services:

● Vodafone Idea should look at new possible ways to gain lost market share they should try to introduce new services like Tele media services and digital TV services. They can also provide services which their competitors are providing at a much cheaper rate to attract customers. They should try to create an integrated ecosystem by giving discounts on other products after purchase of one of their key products or services.

Thank you.