Vodafone Idea Limited (VIL), one of the leading Indian telecom operators, has recently re-branded its identity as ‘Vi’ (read as We) as part of its consolidation efforts to integrate the two brands: Vodafone and Idea formally. Vodafone’s Indian arm and Idea Cellular had amalgamated their operations in August 2018 to survive in the highly competitive Indian telecommunication market.
However, despite the merger, the consolidated Vodafone idea ltd entity was still carrying the burden of two separate identities from the customer service and sales operations viewpoint. Also, there was a little awareness amongst consumers about their alliance.
“As the integration of the two businesses is now complete, it’s time for a fresh start. That’s why we believe that now is the perfect time to launch Vi, one company that combines the strengths of Vodafone India and Idea. Vi’s focus will be to deliver to citizens and businesses in India a superior network experience, better customer service, and leading products and services.” said Nick Read, CEO of Vodafone Group PLC in a company statement.
The re-branding exercise is an attempt to strengthen brand positioning and lessen the company’s operational expenditure of upholding two distinct brands. The development has come on the heels of Vi’s decision to raise Rs. 25,000 crores through share sales and other tactical means to clear the aggregated gross revenue (AGR) dues. Earlier this month, the Telco received much-needed respite after the Supreme Court, India’s apex law body, provided Vodafone an extended time frame of 10 years to pay the AGR dues it owes to the Indian government.
Indian telecom’s changing equations
India’s telecom sector had over a dozen companies operating until a decade back. However, Jio’s entry and its untenable pricing pushed several money-losing carriers to exit the business or get amalgamated. Since the arrival of Jio, the erstwhile telecom behemoths Bharti Airtel and Vodafone are also struggling to retain their customers.
RJio currently commands 33.47% of the wireless market share, Airtel 28.31%, and Vi 27.57%, according to the Telecom Authority of India (TRAI).
It is worthwhile to note that Vodafone idea ltd (now Vi) had lost 6.3 million subscribers in March, while 1.2 million customers departed from the Bharti Airtel network. In the same period, Reliance Jio, on the other hand, added 4.68 million subscribers.
Interestingly, Vodafone and Idea together had over 400 million customers when their merger was announced. The combined subscriber base of VIL had shrunk to around 300 million by April 2020. On the other hand, RJio is now the biggest Indian Telco with close to 400 million subscribers.
Attempt to regain market share
The industry onlookers believe that Vi’s revamp initiative is aimed at invigorating the brand that resonates with the style quotient of both young and enterprise customers. After the arrival of Reliance Jio, both Vi and Bharti Airtel have been trailing in subscriber market share and trying several branding tactics to fortify their position.
While the current rebranding exercise may generate user interest in the short-term, Idea Vodafone (Vi) will need substantial efforts to regain its market share. The telecom space is getting evolved with the two significant players RJio and Bharti Airtel, competing from neck to neck. While Bharti Airtel may as well have lost considerable subscribers, the company has strong foundations to recover from the onslaught of Jio.
Jio is sitting on a hotbed of opportunities to build a Jio ecosystem and has already raised Rs 1,52,056 crore from top tech investors earlier this year. (See: The Jio ecosystem has begun to unfold). Vodafone Idea, too, needs to entice massive equity infusion to unload the severe financial challenges it has been facing and change its dwindling fortunes.
Vodafone Idea or Vi said that it would continue to invest in 4G wireless technology to strengthen network coverage and capacity, a statement that it should firmly adhere to hold back its customers.
With the 5G era at doorsteps, technologies such as the Internet of Things (IoT) and Robotic Process Automation (RPA) will get rapid enterprise deployments. And as such, it will be network superiority that will make the difference.