A guest column by Prof. Surya Mahadevan, faculty in the Marketing Area at TA Pai Management Institute, Manipal.
Vodafone-Idea (VI) number 2 and 3 in the telecom sector merged in 2017 to become the market leader with 41% revenue market share. In the following 4 years, in the most inexplicable manner, the merged entity witnessed its revenue market share plummet to 21%. In a rash of setbacks Vodafone Idea lost their AGR case in the Supreme court which created an incremental debt burden of Rs.58000 crores. The quarterly losses added to the misery and the company’s net worth became negative. Clearly VI was facing a serious existential crisis and the company and its chairman made repeated representation for succor.
Finally, we have a near comprehensive policy announcements by Government in September 2021. Does the reform package addressing the issues in the sector constitute an effective ‘rescue’ of the drowning VI?
This question needs due consideration of the order of the financial stress at VI, additional investments required for 5G, balance spectrum validity and license period of VI, potential let up (? ) in the competitive intensity leading to ARPU increase, promoter’s appetite for risk/reward and cannot be predicated on just the reform package.
We will therefore address this question in 7 parts starting with the composite reform package from the government.
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About the author
Prof. Surya Mahadevan is a faculty in the Marketing Area at TA Pai Management Institute, Manipal. He also heads the Corporate Engagement and PGDM- Marketing Program
Prof. Surya Mahadevan has 30 years of work experience in the FMCG and Telecom sectors. He played leadership roles managing large brands such as Tata, Reliance, Aircel, Loop, Maltova, Viva and Amul. He has worked across Sales, Marketing, Retail, and Customer Service functional areas and in his last assignment before joining TAPMI, he was responsible for Mumbai Circle Telecom operations as Chief Operating Officer at Loop Mobile.Vodafone-Idea Surya Mahadevan TAPMI