Though it maintained the 3rd rank, the revenues slipped 20.5% in the fiscal year 2017-18 compared to previous year. Like other incumbents, it had to take the brunt of hyper-competition. At the same time, it also had to face declining consumer confidence as its merger news with Vodafone came out in public. Subscribers were anxious as they saw what happened with the subscribers of Telenor and Aircel once the news about them exiting the market became public.
Vodafone’s merger with IDEA CELLULAR is finally approved and the process should be over by October end 2018 as per the present understanding of the things. This gives the new entity around 6 months before it hits the next fiscal year, giving them enough time to fine tune integration before putting up the objectives for next fiscal.
Idea also is offering VoLTE services in 20 circles of the 22 telecom circles in India. This brings an advantage to Vodafone as it only has VoLTE in 13 circles. Enabling of VoLTE becomes important for operators as they can plan to shut their 2G networks for subscribers without losing them, who still use a mobile phone for voice services.
Idea brings in a lot of resource pool to Vodafone after the merger. It can potentially bring in the volume in terms of subscriber count to Vodafone, which has been primarily a value player and remained confined to the ‘elites’ and youth in between.
At the same time, Idea has been among the most preferred prepaid brands in India. This is exactly the segment that Jio is onboarding through JioPhone. With the Idea expertise in successfully tapping this base for several years, the new entity should be able to make inroads in this segment as well with Vodafone adding power to the muscle.
With many key roles in the merged entity going to Idea veterans, the human capital with the operator is plausible. Under the leadership of Himanshu Kapania, who is now appointed as a non-executive board member, Idea has been benefiting from the best of the minds in the industry who shall continue to pursue new goals in the merged entity with newer and greater responsibilities. Some of the functions like marketing led by Sashi Shankar have not only created engaging interactions with the customers and other stakeholders through outreach, but Idea’s marketing campaigns have been recognised as one of the industry’s best campaigns, which always would have a social message promoting the significance of telecom and of recently digital in common man’s lives.
In the newly merged entity, Idea brings in more of a consumer play essential low tier segment to the forth. On the other hand, Vodafone brings in high paying customers as well as forward-looking enterprise services. Together, they are going to give a very tough competition to both the incumbents as well as challenger brands, which are not as equally balanced as Vodafone-Idea to cater to both the market segments.