A new launch
Vodafone Idea is expected to relaunch its brand on Monday, unveiling an entirely new identity and communication around it, it is certainly learned.
The relaunch is to have a joined brand identity and advertising around it as the organization has till now been advertising the two brands distinctly, officials familiar with the matter said.
The entire leadership of the entity – which was born out of the merger of Vodafone India and Idea Cellular in August 2018 – is likely to announce the renewed brand positioning as it tackles a tough business situation where parent Vodafone Group is unwilling to commit any extra funds.
Will it bring a change in fortune
The relaunch is to have a combined brand identity and advertisement around it as the company has till now been advertising the two brands individually, officials familiar with the matter stated.
Vodafone Idea Ltd. Will present a strategic announcement on Monday as it looks to take on competitors that have been luring subscribers from the struggling No. 3 wireless carrier in a fiercely competing market. The leadership team of Vodafone Idea will address the media through a virtual platform at 11:45 a.m., it said in an invite to the media. This comes to a couple of days after the carrier’s board authorized up to Rs 25,000-crore fundraising by way of either issuing equity shares, global depository receipts, American depository receipts, foreign currency bonds, convertible debentures, or warrants.
A Mint story stated Amazon and Verizon are planning to invest $4 billion in the company. While that sent the shares of the company soaring the board had clarified on the bourses that currently there is no such plan that is being considered.
The billionaire Kumar Mangalam Birla and Vodafone Group Plc.-owned carrier has lately got some legal relief from the Supreme Court in a nearly two-decade fight with the government over the calculation of adjusted gross revenue. The firm owes Rs 50,400 crore to the Department of Telecommunications in past dues and is pressed down by the Rs 1,65,900-crore debt (including AGR liabilities).
The operator hasn’t reported an annual profit since the combination was announced in 2017, hit by the brutal tariff war unleashed by Mukesh Ambani’s Reliance Jio Infocomm Ltd. Vodafone Idea’s wireless subscribers fell to 30.9 crore as of May 2020 compared with Reliance Jio’s 39.27 crore and Bharti Airtel Ltd.’s 31.7 crore.
Vodafone Idea underwent a net loss of Rs 25,460 crore in the quarter ended June. Its revenue declined 9.3% sequentially to Rs 10,660 crore. Its operating profit decreased 6% quarter-on-quarter to Rs 4,100 crore. The company also dropped 580 basis points in revenue market share during the period.
The total promoter shareholding persisted at 72.05% as of June 2020. While Indian promoters hold 18.48%, foreign promoters hold 53.57%. Financial institutions hold a 10.8% stake, with foreign investors and mutual funds owning 7.19% and 2.75%, respectively.
The Future Ahead
The unveiling of this new brand is to demonstrate the superior quality of calls and top-notch service around it, officials said.
The attempt is to draw a new set of subscribers on the assurance of secured quality under this brand and stem further user erosion, it is learned.
While erstwhile Idea Cellular had a more rural stretch, Vodafone was successful in the urban areas. The telco has already mixed its postpaid plans under the Vodafone brand.
But the telco has been regularly losing its customers to rivals Reliance Jio and Bharti Airtel.
It has observed its user base fall to nearly 280 million in June end from 408 million at the time of the merger. Its revenue market share (RMS) also fell 448 basis points (bps) sequentially to 23.3% in the June quarter, triggered by heavy market-share drop in urban circles, analysts stated. Market leader Jio, in contradiction, reported strong sequential growth – 702 bps to 41.8% – in its RMS in the April-June period, while Airtel’s RMS too rose 391 bps on-quarter to 34.8%.
Last Friday the telCo announced that it intends to raise funds of up to Rs 25,000 crore through a mix of debt and equity instruments in one or more tranches, which will be used to meet statutory dues and invest in network operations to beat rivals.
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Vodafone Idea Ltd. will present a strategic announcement on Monday as it looks to take on rivals that have been attracting subscribers from the struggling No. 3 wireless carrier