Vodafone denies its India Exit Rumor

1 Nov 2019  Read 723 Views

Vodafone isn't Leaving. But it's Surely Looking for Life Support! Vodafone has officially denied its 'India Exit' rumor BUT...
In this tough time for telecom sector, can Vodafone find some respite?

A debt-laden Vodafone might ‘pack-up’ and leave any day! That’s what the IANS reports said and telecom world was buzzing with it. Although the company denied the news completely, termed it as a rumor and called it 'malicious'. The news was shocking because once a top competitor in the Telecom sector, Vodafone has finally reached here.

An all-time low market cap, diminishing subscriber base, constantly increasing quarterly losses and AGR ruling by Supreme Court together forced the global telco giant to make a probable exit from the Indian market.

Before getting on to the sad present condition, let’s talk about its pleasant beginning.   

How Vodafone Sneaked into the Indian Market

Fun fact – As soon as Vodafone entered India, it became the 4th largest telecom operator because it acquired Hutch (number 4 telecom operator in India in 2007). 

Vodafone entered the Indian market with much fanfare. Who doesn’t remember the cute Pug that used to rule TV screens with a background score “You & I… in this beautiful world…”.

Then came a golden period for Vodafone, when it was at the peak of its operations and its branding with ‘Zoo-zoos’ worked tremendously in its favour. But, as they say nothing lasts forever!

Jio Enters & All Others Run Around with Tails Down

Year 2016 was nothing less than a nightmare for Vodafone. But, it was not alone in this suffering. Except Jio, every other player in the telecom space was running for survival. As per one of the industry reports, Airtel, Idea and Vodafone together lost more than 1 cr subscribers between August and September 2018. While, Jio gained 1.3 cr subscribers.

Vodafone Tried Everything but Failed!

When Jio entered the market, a company statement said that there’s nothing to worry about as the company has seen entry of tens of competitors earlier as well and Vodafone excelled every time.

But, the following quarter was miserable for their revenue figures. And the streak continued. It brought them to a level that they were forced to merge with Aditya Birla Group owned Idea cellular. So, here’s what we now know as Vodafone-Idea.  

It tried hard but, couldn’t curtail the damage caused earlier.

What’s Left for Vodafone-Idea?

Vodafone-Idea merger is not working very well (as per the subscriber base count over time). There are no strategic operational issues as such but, the venture is just not able to recover revenue losses. So, now when Vodafone is finally not leaving, the merger will probably keep struggling as it is.

Although the company has also said that it is engaging with the government, requesting them to help the telecom sector in reviving.

Now, will it be any better for Vodafone-Idea? Well, it will be too early and too vague to comment on this.

Hope you liked this information. Comment below with your opinions/suggestions. Should you wish to stay updated and would like to receive relevant financial news and analysis straight in your inbox, subscribe Smart Mornings. 

About the Author: Ratan Deep Singh | 146 Post(s)

Ratan is a Biotechnology graduate and a former print-media Journalist, who specialized in marketing to take up Brand Communication. He’s a grammar Nazi & big-time foodie who appreciates creativity and often tries his hand in creative poetic writing.

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