CHAPTER NO.

1: INTRODUCTION

1.1 Introduction to Vodafone Idea (VI)

Vodafone Idea Limited, now known as Vi, is an Indian telecom company that was formed
in August 2018 after the merger of Vodafone India and Idea Cellular. The company has a
strong presence in the Indian telecom market and offers a wide range of services, including
voice and data services, value-added services, and enterprise solutions. Vi is now looking
to introduce new marketing strategies to increase its market share and revenue. This paper
will outline some of the marketing strategies that Vi can implement to achieve this goal.

Branding and Positioning Strategy:

One of the key marketing strategies for Vi would be to focus on branding and positioning.
The telecom industry in India is highly competitive, and Vi needs to differentiate itself
from other players in the market. Vi should focus on creating a strong brand image and
positioning itself as a reliable and innovative telecom provider. This can be achieved by
creating a brand personality that reflects the company's values and mission. Vi can also
develop a unique brand identity, including logo, color scheme, and packaging that reflects
the brand personality.

Product Development Strategy:

Another important marketing strategy for Vi would be to focus on product development.
The telecom industry is constantly evolving, and customers are always looking for new and
innovative services. Vi needs to keep up with these changes and introduce new products
and services that meet the evolving needs of its customers. Vi can conduct market research
to identify the emerging trends in the telecom industry and develop products that cater to
these trends. For example, Vi can focus on developing value-added services, such as cloud
storage or streaming services, to attract customers.

Pricing Strategy:

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Pricing is a critical element of any marketing strategy, and Vi needs to develop a pricing
strategy that is competitive and profitable. Vi should conduct a competitive analysis of the
telecom industry to identify the pricing strategies of its competitors. Based on this analysis,
Vi can develop a pricing strategy that is competitive and attractive to customers. Vi can
also introduce promotional pricing or bundled pricing to attract new customers.

Distribution Strategy:
Vi needs to develop a strong distribution strategy to ensure that its products and services
are easily accessible to customers. Vi can leverage its existing distribution channels, such
as retail stores and online platforms, to increase its reach. Vi can also partner with thirdparty
distributors to expand its distribution network. Additionally, Vi can focus on developing a
strong online presence, including a user-friendly website and mobile app, to make it easier
for customers to access its products and services.

Promotional Strategy:
Promotion is a key element of any marketing strategy, and Vi needs to develop a
promotional strategy that is effective in reaching its target audience. Vi can use a range of
promotional tactics, including advertising, sales promotions, public relations, and social
media marketing, to reach its target audience. Vi can also leverage the power of influencers
to promote its products and services. Influencers can help Vi reach a wider audience and
build brand awareness.

Customer Service Strategy:

Customer service is critical in the telecom industry, and Vi needs to develop a strong
customer service strategy to retain its existing customers and attract new ones. Vi should
focus on providing excellent customer service, including a user-friendly website, mobile
app, and customer support center. Vi can also use customer feedback to improve its
products and services and address any issues that customers may have.
Corporate Social Responsibility:

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Corporate social responsibility (CSR) is becoming increasingly important in today's
business environment, and Vi needs to develop a strong CSR strategy to demonstrate its
commitment to social and environmental issues. Vi can focus on initiatives such as
reducing its carbon footprint, supporting local communities, and promoting diversity and
inclusion. Vi can also partner with NGOs and other organizations to support social and
environmental causes.
Advertising success stories abound: Amazon uses their customers to market products to
others via the "other buyers who looked at this, also looked at this" feature. Coca-Cola uses
the Internet to tell stories, while MasterCard uses humourous clips and viral marketing.

Market Research: The first step in developing an effective marketing strategy is to conduct
market research. Vodafone Idea should analyze its competitors, target market, customer
preferences, and current trends in the market.

Segmentation: The next step is to segment the market into different groups based on
demographics, psychographics, and geographic location. This will help the company tailor
its marketing messages and offerings to specific customer segments.

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Targeting: After segmenting the market, Vodafone Idea should identify the most profitable
segments and focus its marketing efforts on them. This will help the company maximize
its ROI and increase its market share.
Positioning: The company should then position its brand in a unique and compelling way
that differentiates it from its competitors. This will help Vodafone Idea create a strong
brand image in the minds of consumers.

Brand Identity: Developing a strong brand identity is critical for Vodafone Idea's success.
The company should create a consistent and recognizable brand image that resonates with its
target market.

Product Offerings: Vodafone Idea should offer a variety of products and services that cater
to the different needs of its target market. This could include different types of mobile and
broadband plans, value-added services, and other offerings.

Pricing Strategy: The company should develop a pricing strategy that is competitive and
attractive to its target market. This could involve offering discounts, promotions, or other
incentives to attract new customers.

Promotional Activities: Vodafone Idea should engage in various promotional activities to

raise brand awareness and attract new customers. This could include advertising, social
media marketing, public relations, and other tactics.

Customer Service: Providing excellent customer service is crucial for retaining existing
customers and attracting new ones. Vodafone Idea should invest in training its employees
and providing them with the tools and resources they need to deliver a great customer
experience.

Partnerships: The company should partner with other businesses and organizations to
expand its reach and offer new products and services to its customers.

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Innovation: Vodafone Idea should continuously innovate and improve its products and
services to stay ahead of the competition and meet the evolving needs of its customers.

Customer Feedback: The company should actively seek feedback from its customers and
use it to improve its products, services, and overall customer experience.

Data Analytics: Analyzing customer data can provide valuable insights into customer
preferences, behavior, and trends. Vodafone Idea should invest in data analytics tools and
resources to make informed business decisions.

Mobile Apps: Developing mobile apps can help Vodafone Idea reach customers on-the-go
and provide a more convenient and personalized experience.

Digital Marketing: The company should invest in digital marketing to reach a wider
audience and engage with customers online. This could include social media marketing,
email marketing, and other digital tactics.

Localized Marketing: Vodafone Idea should develop marketing campaigns that are tailored
to the local culture, language, and customs of its target market.

Influencer Marketing: Partnering with influencers can help Vodafone Idea reach new
audiences and build credibility with its target market.

Community Outreach: Engaging with the local community can help Vodafone Idea build a
positive reputation and foster customer loyalty.

Customer Retention: Retaining existing customers is crucial for the long-term success of
the company. Vodafone Idea should invest in customer retention strategies, such as loyalty
programs and personalized offers.

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Measurement and Optimization: Finally, the company should continuously measure the
effectiveness of its

In March 2017, it was announced that Idea Cellular and Vodafone India would merge. The
merger got approval from the Department of Telecommunications in July 2018. On 30
August 2018, National Company Law Tribunal gave the final nod to the Vodafone-Idea
merger[19] It was completed on 31 August 2018, and the new entity was named Vodafone
Idea Limited, creating the largest telecom company in India by subscribers and revenue.
Under the terms of the deal, the Vodafone Group held a 45.2% stake in the combined entity,
the Aditya Birla Group held 26% and the remaining shares were to be held by the public.[15]
Vi lost a significant number of gross and active subscribers in the month of August 2020
after the merger.[22]

Until 7 September 2020, Vodafone Idea Limited operated two separate brands:[23] Vodafone
and Idea who both operated pre-paid and post-paid GSM
service.[24][25]

On 3 February 2023, the Government of India ordered the company to convert its interest
dues worth 161.33 billion rupees ($1.96 billion) to equity at the rate of 10 rupees per share,
thus making the government the single biggest shareholder in the company.[26]

Background of the merger

Vodafone Group

• Vodafone is a British multinational company. It is one of the largest telecommunication

groups based in the United Kingdom.

• It provides its services in over 25 countries across the globe, partners with mobile
networks in 46 more countries, and has fixed broadband services in 18 markets, majorly
in Europe, Africa, the Middle East, and Asia pacific.

• The services provided by the Vodafone group range from voice, messaging, data, and
fixed communications.

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• The Vodafone Group had 534.5 million mobile customers and 19.9 million fixed
broadband customers as of 2018. This included India and all of the customers of the
company including the joint ventures.

Aditya Birla Group

• Aditya Birla is an Indian multinational company based in Mumbai.

• It is in the group of Fortune 500 companies. It has its business operations in almost 36
countries.

• It has a workforce of 120,000 employees.

• Globally it is number one in aluminium rolling, viscose staple fibre, and carbon black.

• In India, the Aditya Birla Group leads in several sectors such as fashion, lifestyle,
viscose filament yarn, grey, white cement, and concrete. It is the largest producer in the
Chlor-alkali sector, as well as in life insurance and asset management.

• Idea Cellular was the first multinational company under the Birla group. It was
established in 1995.

• Idea Cellular was the third-largest telecom company in India, with a market share of
15.9%.

1.2 Reason for the merger

With this merger, the two companies have gained immensely. It was a horizontal merger
amongst the two biggest players in the telecom industry. This merger deal was worth $23
billion.

The rationale behind this merger, when both the companies were doing well individually,
is explained below:

Synergy benefits

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• Both the companies had said in their statement that the synergy would be extremely
cost-effective. The estimated savings annually would go up to 14,000 crores. The
savings would be in the form of both capital expenditure as well as operating costs.

• EBITDA (earnings before interest, tax, depreciation, and amortization) of both the
companies were around the margin of 30%. It was comparatively lower than that of
Bharti Airtel and Reliance Jio Infocomm Ltd.

Domination of the market

• Individually, the market share of Vodafone India and Idea was very low as compared to
Bharti Airtel and the recent entry of Reliance Jio. Reliance Jio took the telecom industry
by storm.

• The merged company would gain 400 million subscribers, a customer market share of
35%, and a revenue market share of 40%.

Spectrum share

• Vodafone and Idea had individual spectrum holdings of 411 MHz and 316 MHz
respectively. However, on the other hand, the spectrum hold of Bharti Airtel and
Reliance Jio was 860 MHz and 650 MHz respectively. Therefore, effectively competing
in the industry individually was proving to be difficult for Vodafone and Idea.

• The amalgamation of the companies would give, it was expected, the merged company
a hold of 728 Mhz increasing the chances of the merged company to rank no one or on
number 2 in India.

1.3 Deal structure

The merger was an all-share merger, which later moved on to the deconsolidation of
Vodafone operations in India. The deal excluded Vodafone’s 42% share in the Indus

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Towers. The promoters of both companies had equal rights on important matters. Both the
companies had joint control over the appointment of the Chief Operating Officer (COO)
and the Chief Executive Officer (CEO).

Merger ratio

The merger ratio was 1:1. This ratio was based on the price of Idea at 72.5 per unit. Implied
enterprise value for Idea and Vodafone was INR 72 thousand crores and INR 82 thousand
and 8 hundred crores respectively. The agreement had a break fee of Rs 3,300 crore payable
upon certain conditions.

Stock transfer

Under the deal, Aditya Birla Group was allotted a stake of 4.9% of the merged company.
The stake was given from Vodafone for Rs 109 per share (INR 3900 crores). This brought
the shareholding of the Aditya Birla group to 26%, therefore giving Vodafone a stake of
45.2%. 26% stake was given to other promoters of the idea group and the remaining 24%
was owned by the public.

Lock-in period

Neither company could purchase or sell any shares from or to any third party for a period
of 3 years (lock-in period). Vodafone offered an acquisition of 9.5% additional without any
premium, enabling the Aditya Birla Group to acquire an additional 9.5% of the shares within
the period of the next 3 years at a predetermined price of Rs. 103 per share.

Sale at market rate

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If at the end of 3 years Aditya Birla group fails to purchase any stakeout of the additional
stake of 9.5%, then they will be given the last opportunity to purchase the stake at the
prevailing market price for the purpose of share equalization.

Sale to third parties

If after four years Aditya Birla Group still hasn’t purchased Vodafone shares for
equalization, then the shares may be sold to a third party.

Net debt

Vodafone contributed net debt of Rs. 55,200 crore to the merged entity, whereas Idea
contributed Rs. 52,700 crore. Vodafone contributed net debt of Rs. 2,500 crore more than

Hurdles faced

The merged entity faced many regulatory challenges such as:

• The entity was exceeding the caps on revenue market share, subscriber market
share, and spectrum holdings in at least six circles each.

• In the spectrum holding cap, the combined entity was shooting over 25% in
Gujarat, Kerala, Maharashtra, Madhya Pradesh, and western Uttar Pradesh.

Approval from DoT (Directory of Telecommunications)

The DoT provides for M&A guidelines (Guidelines for Transfer/Merger of various
categories of Telecommunication Service License/Authorization under Unified Licence on
Compromises, Arrangements, and Amalgamation of the Companies), wherein it lays down
certain conditions which are meant to be met in order to receive approval for mergers in
the telecom industry.

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The guidelines provide that the entity must submit excess spectrum within one year from
receiving the permissions. The guidelines permit the entities to sell excess spectrum to
different telecom companies.
The merged entity can have up to fifty per cent spectrum holding in each band individually.
However, the challenge faced by the merged entity was that they were breaching the
spectrum cap 900MHz band. The obstacle, with the excess of market share, was that it had
to be reduced to the prescribed limit within one year of receiving the approval.

Effect of the merger

The Vodafone idea merger was embraced by all the stakeholders but had its repercussions
as well.

Employee

The merger took a toll on the employees of both companies. The employees were met with
serious uncertainty. Somewhere, the companies failed to boost or maintain company
morale. Vodafone – Idea had to let go of 5000 employees leading up to the merger. The
employees who fell in the bottom quartile in the performance assessment were asked to
leave the company. Other than that, there was a huge cultural difference that affected the
remaining employees. The companies were different with respect to their salary levels and
human resource processes. According to a few of the employees, the new structure which
was adopted after the merger led to demotions. Many of the Idea employees who were
asked to leave were accommodated in different companies under the Aditya Birla Group,
but no such resort was given to the employees of Vodafone India.

Customer

The merger of Vodafone and Idea is a perfect example of a market that mostly benefits the
customers. This deal released the telecom industry from the pressure of fierce prices and
tariffs. The entry of Reliance Jio into the telecom industry had a huge impact. It cornered
other companies to decrease their prices as Reliance Jio had launched free voice calling

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and data at discounted rates. The merger meant an increase in competition which means
that the consumers will be paying less price. The merger increased their reach. It now
collectively provides 4G services to a wider range. The assets were also combined with
both the companies which meant better services, airwaves, and workforce. It also benefits
the customer with better quality of network and expansion of the same across the country.
The company can further invest in R&D to improve its services by providing innovative
products. The company is now capable of providing better 4G and 5G network access to
its consumers. Vodafone being a market lead in urban circles and Idea being a market lead
in the rural circle, the synergy of both the companies will give them a stronghold in both
the circles.

Other stakeholders

The merger left the telecom industry with only three players namely Bharti Airtel, Reliance
Jio, and Vodafone Idea Ltd. Vodafone Idea Ltd. became the largest player with 35% of the
market share worth INR 1.5 lakh crores. The telecom industry was amidst fierce price wars
due to the entry of Reliance Jio. The price wars were affecting the revenues and profits of
the telecom industry. The cost-cutting would benefit the government. It would also help in
controlling the cut-throat competition in the industry, stabilizing the telecom industry in
India.

Operations after the acquisition

While Vodafone and Idea had joint control over the appointment of the CEO and COO,
Vodafone had exclusive rights to appoint the Chief Financial Officer (CFO). Giving
Vodafone more financial rights.

Key management

Vodafone appointed Akshaya Moondra as the CFO. Both the companies jointly appointed
Balesh Sharma as the CEO and Ambrish Jain as COO.

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Board composition
The Board comprises twelve directors which will include six independent directors along
with the chairman. Mr. Kumar Mangalam Birla was appointed as the chairman. The Board
has equal representation from both companies.

The current status of Vodafone-Idea merger

In the month of September 2020, Vodafone – Idea rebranded itself. The company used the
initials to rebrand itself as ‘Vi’. The rebranding took place after almost two years of the
merger, however it shows the spirit of integration. The company in its statement said that
the name ‘Vi’ is to be pronounced as ‘we’. The long-overdue rebranding was done to
commemorate the final lapse of the merger. It marked the consolidation of the two
companies after three years of merger talks and execution.

Rebranding created a lot of buzz over social media. The company in a statement said that
the pronunciation of ‘Vi’ reflected the origin of the brands and the collective nature. There
have been various advertisements of the ‘Vi’ across digital platforms. The announcement
of the rebranding was however led by the Hon’ble Supreme Court of India directing
Vodafone Idea to pay back government dues. Vodafone Idea owes approximately INR 504
billion. To pay off these debts, the company has to raise 3.41 billion dollars. The company
plans to raise capital through a mix of debt and equity. It has received the required Board
approval. It also plans to focus on joining the 5G service sector in India.

Conclusion

It can be concluded that the merger was needed in order to fight the competitive pricing
policy taken up by Reliance Jio. The consumer is the most beneficial because of this merger
as now all the telecom companies will try to bring in the best technology at the best price
and with better customer service in order to maintain customer loyalty.

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References

• https://www.vodafoneidea.com/content/dam/vodafonemicrosite/docs/pdf/VIL%20
Press%20Release%20-%2031st%20August.pdf
• https://www.adityabirla.com/about-us/downloads/Aditya-Birla-GroupProfile.pdf
Vodafone Case study describes the situation when Idea Cellular and Vodafone after the
entrance of JIO. So, here is the Vodafone case study which describes the position of
Vodafone and Idea Cellular before and post-merger, reasons for the merger, how did
merger take place and critical analyses of the merger.

About Vodafone

Vodafone company came from the UK based Vodafone Group plc. It is a multinational
service provider of telecommunications in 22 different countries as of 20th November
2020. And, in India Vodafone has its headquarter in Mumbai, Maharashtra. Vodafone is
the third largest telecommunication provider in the country. Vodafone

At the beginning of the year, 1992 Vodafone started its company in India from
Bombay(now Mumbai). After the entry of JIO in the year 2016. Afterwards, our Vodafone
case study begins, Vodafone and Idea announced their merger in March 2017. And as of
31st August 2018, it is known as Vodafone Idea Limited.

Vodafone case study explains the reason and the situation of the merger of Vodafone and
Idea. This merger was first announced in March 2017. Afterwards, in July 2018, the
department of telecommunication gave the approval for the merger. Finally, on 31st Aug
2018, the merger was completed and it is announced as Vodafone Idea Limited.

And this merger was the largest telecom merger in India. As per this merger, Vodafone
holds a 45.2% stake, Aditya Birla Group holds 26% and the remaining stakes were held
public. So, to understand the Vodafone case study, let’s understand the reasons for the
Vodafone Idea merger case study.

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 1. The main reason for the Vodafone-Idea merger is to Handel the rising dominance
of Reliance Jio in the Telecom industry. As Jio announced to provide free services
in the first 6 months. As a result, it started to capture the maximum part of the
market.
2. Secondly, the free services from the Jio started the price war between the companies
in the telecom sector( as it in an oligopoly market structure).
3. As a result in case of a price war merger brings confidence in companies with
synergy benefits.
4. At last, the combined entity of Vodafone and Idea was expected to hold a strong
position in the industry. Such as in some circles it became the largest cellular service
provider and in some circle, it was the second-largest after Bharti Airtel. So, a joined
company can focus on being the service provider in pan India.
So, these were the reasons in Vodafone case study for the merger of Vodafone and Idea.

Vodafone Idea Integration

According to the past in the telecom industry, major telephone operators believes the
merger is a strong tool to be in the lead position. As Airtel acquires the Telenor, it acquires
the scope and business from other small telecommunication companies like Augere
Wireless, Videcon, Tikona(4G Spectrum) etc.

Also, Reliance Communication (R Com) merged with Aircel and acquire MTC. Plus the
Tata Telecom also started the process of merging with R Com. As a result in a period of
seven months telephone operators numbers went down to seven from twelve.

Challenges

However, the announcement of the merger creates a negative image in the public, when the
Vodafone and Idea merger was announced the Idea prices started to drop. And the share
price of Idea declines from Rs. 97.70 on 20th March 2017 to Rs. 81.81 on 6th Sep 2017.

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But the merger was important it gave support to the two companies, which were struggling
to survive in the industry. Combined resources will help to compete with only the two
biggest brands(Jio and Airtel).
So, these were the challenges of Vodafone and Idea merger in case of Vodafone case study.

Critical Analysis Of Vodafone Case

The merger of Vodafone and Idea in Vodafone case study gave higher stakes to the Idea
promoters as compared to Vodafone. So, in long run, both companies can gain access to
equal shares in the future.

Here are the few takeaways from the Vodafone Idea merger in Vodafone case study:

1. The very first thing was the acquisition of 4.9 per cent shares of Vodafone by Aditya
Birla. This would amount to a total of Rs. 3874 crore wherein each share is worth
Rs. 108. This would be helpful in increasing the shareholding capacity of Idea to 26
per cent.
2. While in the case of Vodafone case study, Vodafone holds 45.1 per cent of the
shares in the merger, Idea would be allowed to buy another 9.6 per cent but at a
cost of Rs. 130 per share in the period spread over the next four years. However, if
Idea is unable to come up equal to the shareholding percentage of Vodafone, it can
go forward and buy the number of shares required further but at the price prevailing
in the market.
3. And, the chairperson of the newly formed enterprise would be Kumar Mangalam
Birla. On the other hand, Vodafone had appointed the Chief financial officer. As,
after that new CEO was named under both the companies.
4. Lastly, the promotors of both entities have the right to nominate three members for
the board. Also, there are 12 members out of which 6 are independent on the board
in the Vodafone case study of Vodafone and Idea merger.

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Idea Positioning Before Merger

In Vodafone case study of Vodafone and Idea merger, now lets understand the Idea Cellular
Limited is an Aditya Birla Group company. Founded in 1995, the company was
incorporated as Birla Communications Limited and had a license of GSM-based services
in Gujarat and Maharashtra Circle. In the following years, the organization started to
expand its business with Tata Group, Birla and AT&T group of the US in joint venture
form. In August 2015, Idea announced the rollout of its 4G services. It was now competing
with Airtel and Vodafone – in a non-monopolistic market. The company relaunched its
“What an Idea” campaign taking 4G to the rural areas and empowering people through the
usage of 4G services.

Before a merger, it is essential to carefully position and align the ideas and strategies of
both companies to ensure a smooth transition and successful integration. This involves a
thorough analysis of each company's strengths, weaknesses, and values to identify areas of
synergy and potential conflicts.One critical aspect of idea positioning before a merger is to
create a shared vision for the future of the merged entity. This vision should be
communicated to all stakeholders and should serve as a guide for decision-making during
the integration process.

Another important consideration is the alignment of the two companies' cultures. This
involves understanding the values and norms of each organization and identifying areas of
overlap and potential differences. It is essential to develop a plan to address any cultural
conflicts and ensure that the merged company has a cohesive and unified culture.In addition
to culture, it is also essential to assess the compatibility of the two companies' business
models and operational processes. This involves identifying potential areas of overlap,
redundancies, and opportunities for efficiency gains. It is important to develop a plan to
integrate these processes and ensure that the merged company operates seamlessly.Finally,
it is essential to consider the impact of the merger on all stakeholders, including customers,
employees, shareholders, and suppliers. It is important to communicate the benefits of the
merger to these stakeholders and address any concerns they may havet

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But in the year 2016 sudden announcement from Mukesh Ambani about Reliance Jio disrupted the
Indian telecom sector. Below pie chart shows the market share of different telecom players before
the entry of Jio.
As the Indian market is very sensitive towards price and Jio used it to make most of the
profits. So, Jio started to make its all services free for the first six months. Afterwards, they
made the services of voice calls, data extremely cheap. As a result, JIO captured a
significant share of the telecom industry. Here is the pie chart of the post-Jio market share
of various telecom players.

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Vodafone Idea Merger
This transaction required various approvals from government authorities including SEBI,
dept. of Telecom and Reserve Bank of India among others. The Department of
Telecommunications (DoT) has given the green signal for the merger of Vodafone India

and Idea in our Vodafone case study, the largest Merger and Acquisition agreement in the
sector, which has displaced Bharti Airtel from top position after over 15 years. The
approval conditions, which were given over a year after the agreement, were announced in
March 2017 which included an advance payment of Rs 7,268 crore.

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1.4 Idea Contributon

Promoters Aditya Birla Group infused Rs 3,250 crore in Idea Cellular, which separately
raised Rs 3,000 crore ahead of a planned merger with Vodafone India. Following the equity
infusion by Idea’s promoters, their stake in India’s third-largest telecom operator rose to
47.2% from 42.4% now. Idea contributed its assets which included standalone towers with
15,400 tenancies and a stake in Indus towers Ltd of 11.5%.
We, either directly or through our Subsidiaries, provide mobile services in the Andhra
Pradesh, Delhi, Gujarat, Haryana, Kerala, Madhiya Pradesh, Maharashtra and Uttar
Pradesh (West) Circles, and have recently launched services and as such are in the process
of fully rolling-out our network in the Uttar Pradesh (East), Rajasthan and Himachal
Pradesh Circles pursuant to licenses issued by the DoT.

There will be a saving of over 60 per cent of the cost of the operation and this will aid in
improving the quality and performance of the service through investments from the saved
money.

Enhancement in network infrastructure will be observed while the operational efficiencies

have a chance to reach excellence. Moreover, the revenue market share is expected to rise
for all the locations and the spectrum of the entity would exceed the initial caps.

ne critical aspect of idea positioning before a merger is to create a shared vision for the
future of the merged entity. This vision should be communicated to all stakeholders and
should serve as a guide for decision-making during the integration process.

Another important consideration is the alignment of the two companies' cultures. This
involves understanding the values and norms of each organization and identifying areas of
overlap and potential differences. It is essential to develop a plan to address any cultural
conflicts and ensure that the merged company has a cohesive and unified culture.

20
The entry of Reliance Jio Infocomm Ltd in September 2016, with free services for almost
seven months and cheap tariffs, had eroded margins and impacted the revenue of rivals.
The contribution of Vodafone will be Vodafone India along with standalone towers with
15,400 tenancies without including an 11.5% stake in Indus Towers. According to the
agreement between Idea and Vodafone.

Vodafone will contribute more amount of net debt, about Rs 2,480 crore than Idea at the
completion of the merger. Post-termination of both companies, the combined entity will be

21
a joint venture between Vodafone and Idea in the Vodafone case study. Which will account
for the under the equity method, controlled by both Aditya Birla Group and Vodafone.

Idea promoters hold the rights to acquire a 9.5% additional stake from Vodafone under the
agreed deal to equalize shareholdings over time as per the following proposition

Vodafone: 45.1% – 9.5% = 35.6%

Idea: 26% + 9.5% = 35.6%

1.5 Impact Of Merger On Telecom Industry

There are also several other implications that this merger of Vodafone case study will bring
forth on the telecom industry.

1. Firstly, there can be initiatives based on the renewal of price discipline for the
disruptive entry by Jio has caused some serious misbalance

2. Secondly, the poor financial health of the telecom sector can be observed. And
through such mergers, there will be an infusion of health and life. Since India is the fastest-
growing market in terms of subscriber base.

3. Through the merger, Vodafone and Idea will overcome their debts and a large sum
of credit will be infused into the system

22
4. The deal has also saved both the telecom companies from selling off their business.
As was being planned by them initially and this would directly impact the quality of
services being provided by different players in the industry

The merger in the Vodafone case study will surely boost the pace of the telecom sector. It
has also been found that the savings, synergies and also the spectrum will have a substantial
impact on the escalating growth.

There will be a saving of over 60 per cent of the cost of the operation and this will aid in
improving the quality and performance of the service through investments from the saved
money.

Enhancement in network infrastructure will be observed while the operational efficiencies

have a chance to reach excellence. Moreover, the revenue market share is expected to rise
for all the locations and the spectrum of the entity would exceed the initial caps.

Company History - Vodafone Idea Ltd.

We were incorporated as Birla Communications Limited on March 14, 1995 and granted a
certificate of commencement of business on August 11, 1995. Our registered office was in Mumbai,
Maharashtra. Our name was changed to Birla AT&T Communications Limited on May 30, 1996
following the execution of a joint venture agreement dated December 5, 1995 between AT&T
Corporation and Grasim Industries Limited pursuant to which the Aditya Birla Group held 51% of

our Equity Share capital and AWS Group held 49% of our Equity Share capital. Our registered office
was transferred from Industry House, 1st Floor, 159 Church Gate Reclamation, Mumbai 400 020,
Maharashtra to Suman Tower, Plot No. 18, Sector 11, Gandhinagar 382011 Gujarat on October 22,
1996. With effect from January 1, 2001 following our merger with Tata Cellular Limited the joint
venture agreement between AT&T Corporation and Grasim Industries

Limited dated December 5, 1995 was replaced by a shareholders agreement dated

December 15, 2000 entered into between Grasim Industries Limited on behalf of the Aditya
Birla Group, Tata Industries Limited on behalf of the Tata Group and AT&T Wireless

23
Services Inc. on behalf of the AWS Group following which our name was changed to Birla
Tata AT&T Limited on November 6, 2001. Consequent to the introduction of the “Idea”
brand, our name was changed to Idea Cellular Limited on May 1, 2002. The AWS Group
exited from the Company on September 28, 2005 by selling 371,780,740 Equity Shares of
the Company, which constituted 50% of the holding of AT&T Cellular Private Limited in
our equity share capital, to ABNL and by transferring the remaining 371,780,750 Equity
Shares to Tata Industries Limited.

The Tata Group ceased to be a shareholder of the Company on June 20, 2006 when Tata
Industries Limited and Apex Investments (Mauritius) Holding Private Limited (formerly
known as AT&T Cellular Private Limited) sold all their shares in the Company to the
Aditya Birla Group.

On October 26, 2006, P5 Asia Investments (Mauritius) Limited (“P5 Asia”) acquired
14.60% of our Equity Share capital. Under a Governance and Exit Rights Agreement dated
October 23, 2006 between P5 Asia, ABNL and Birla TMT, so long as an initial public
offering has not occurred and P5 Asia holds no less than 10% of our Equity Shares, ABNL
and Birla TMT are required to procure that (a) our Company and its Subsidiaries shall not
take or pursue any of the following actions without P5 Asia’s prior consent (such consent
to be obtained in a board and/or shareholders resolution) including in respect of (i) any
merger with, acquisition of, or amalgamation or consolidation with another company or
business; (ii) assuming or permitting to exist any borrowings or indebtedness in the nature
of borrowings if the amount of all such borrowings of our Company and its Subsidiaries
would exceed Rs. 6,800 million; (iii) entering into a new line of business; (iv) increasing
our authorized or issued share capital; or (v) entering into a joint venture and (b) our
Company makes available to P5 Asia certain financial information relating to our Company
and its Subsidiaries such as monthly management accounts, quarterly unconsolidated
balance sheet and profit and loss account and the annual audited consolidated balance
sheets and profit and loss accounts.

24
P5 Asia also has a right to appoint one director to our Board so long as it holds at least 10%
of our total issued and outstanding Equity Shares. Mr. Biswajit Subramanian has been
appointed to our Board by P5 Asia pursuant to the exercise of the above right. In addition,
any IPO of our Equity Shares requires P5 Asia’s written consent, and, further, in any such
IPO, P5 Asia has the right to offer for sale such number of Equity Shares representing up
to 10% of the total Equity Shares which are held by it. By its letters dated December 2,
2006 to ABNL and Birla TMT, P5 Asia has given its written consent for the Issue and has
confirmed that it does not intend to offer for sale any of the Equity Shares held by it in such
Issue.

We, either directly or through our Subsidiaries, provide mobile services in the Andhra
Pradesh, Delhi, Gujarat, Haryana, Kerala, Madhiya Pradesh, Maharashtra and Uttar
Pradesh (West) Circles, and have recently launched services and as such are in the process
of fully rolling-out our network in the Uttar Pradesh (East), Rajasthan and Himachal
Pradesh Circles pursuant to licenses issued by the DoT.

The Success Story of Vodafone

Since its entry into India in 2007, Vodafone has established itself as a trusted mobile service
provider in the country. After the launch of Reliance Jio, the company is facing tough
competition in India, and some are even speculating the shut down of the company in India.
Besides India, Vodafone has its operations in over 30 countries worldwide, and despite its
ups and downs, Vodafone has managed to hold a significant share of the
telecommunications market in many countries across the world. Vodafone is yet another
example of a business that started small and went on to make a mark worldwide. Here is
how Vodafone started and rose to become a leading player in the global telecommunication
sector.

25
1.6 About Vodafone Group

Racal Strategic Radio Ltd, a component of Racal Electronics, Britain's biggest

manufacturer of military radio equipment, launched a joint enterprise with American
telecommunications company Millicom in 1981, which evolved into the modern Vodafone.

Today Vodafone provides a wide range of products and services for consumers, businesses,
and Governments. Besides mobile services, Vodafone offers fixed broadband and
television services, cloud and hosting, internet protocol-virtual private network services,
roaming, and unified communications services.

Vodafone's M-Pesa is a mobile financial and mobile payment service that allows customers
to access their bank accounts to receive or send money, purchase stuff, make bill-payments,
save funds, and get simple loans; and Vodafone One Net is a converged fixed and mobile
communications service for big multinational companies as well as small and medium
enterprises

Vodafone also provides machine-to-machine services, as well as tablets, smartphones, and

telematics commodities/services. It has roughly 16,000 retail locations, distributors, and
third-party merchants selling its products.

1.7 Vodafone - Latest News

Vodafone's first-quarter revenue for FY2021-22 increased by 1.4 percent in Germany

which is its biggest market. In the UK, as international travel reopened, the telecoms
behemoth benefited from visitors to the UK utilizing its network. A marginal increase in
Vodafone's revenue also came as it levied roaming fees as a result of the UK's withdrawal
from the EU. Overall, the Vodafone group made revenue worth $51.169B in FY 2020-21
which is 2.32% more than in FY 2019-2020 revenue.

Since the pandemic, Vodafone has experienced a resurgence in mobile phone sales, with
greater customer loyalty across Europe, according to the company.

26
1.8 Vodafone - Industry

Companies in the telecommunications sector make communication possible on a

worldwide scale, whether it's through the internet or phone, over waves or wires, or
digitally. These businesses built the infrastructure that allows data to be transferred
anywhere in the globe in the form of text, speech, audio, or video. Telephone (both landline
and wireless) operators, satellite companies, cable companies, and Internet service
providers are the main corporations in the industry.

Saatchi & Saatchi, a well-known worldwide advertising business, created the Vodafone
logo in 1997. Conversation and voice communication is represented by the apostrophe in
the logo. It brilliantly delivers a classic telecom brand that conveys its intended message in
an aesthetically attractive manner.

Vodafone's tagline says, "Together We Can."

1.9 Vodafone - CEO and Founders

Vodafone was founded by Ernest Harrison and Gerry Whent in 1985.

Ernest Harrison

Sir Ernest Thomas Harrison OBE (11 May 1926 – 16 February 2009) was a British
entrepreneur who was best known for being the first chairman of Racal's spin-off mobile
phone section, Vodafone.

Gerry Whent

Sir Gerald Arthur "Gerry" Whent CBE was the founder and first CEO of Vodafone. He
was born on March 1, 1927, in Ferozepore, India, and died on May 16, 2002, in Chilton
Foliat, Wiltshire.

Nick Read

Nicholas Jonathan Read aka Nick Read is the current CEO of Vodafone group. Born in
27
1964, Nick is a Certified Management Accountant. Prior to joining the Vodafone group,
Nick worked for United Business Media Plc and Federal Express Worldwide. At Federal
Express Worldwide, Nick worked as the Chief Finacial Officer for Europe, the Middle
East, and the Africa region.

Nick joined Vodafone UK as the finance director in the year 2001 and became the CEO of
the Vodafone group in 2018.

Ravinder Takkar

In India, Ravinder Takkar is the MD & CEO of Vodafone-Idea. He was the Ex- CEO of
Vodafone Romania.

1.10 Vodafone - Startup Story

Based in Newbury in the United Kingdom, Vodafone has been offering its services since
1985. Vodafone's story dates back to 1981. British Electronics company Racal Electronics
and American company Millicom Inc joined hands to bid jointly for UK's second cellular
radio license. The joint venture between the two companies was named Racal-Millicom
Ltd. In December 1982, Racal-Millicom Ltd. was successful in earning the second Mobile
phone network license of the UK.

The Network was named Vodafone as the network lets its users transfer voice and data over
the mobile phones. Racal-Vodafone (Holdings) Ltd became the holding company of
Vodafone replacing Racal-Millicom Ltd. Racal held the majority shares in Racal-Vodafone
(Holdings) Ltd. Meanwhile, Racal's radio division earlier called Racal Strategic Radio was
renamed Racal Telecommunication group limited.

In December 1986, Racal Electronics bought the entire shares of Vodafone from the
minority shareholders, and thus Racal became the sole owner of the Vodafone brand.

In September 1988, Racal Telecommunication group limited was renamed Racal Telecom.
In October 1988, when Racal Telecom went public, it came out that Racal Telecom was
valued much more than its parent company Racal Electronics. This led to the de-merger of

28
Racal Telecom from Racal Electronics, and Racal Telecom was renamed again as the
Vodafone Group. Gerry Whent became the first CEO of Vodafone Group.

Vodafone - Mission and Vision

Vodafone's mission statement says, “To connect for a better future and our expertise and
scale gives us a unique opportunity to drive positive change for society.”

Vodafone's vision is, "To be the communications leader in an increasingly connected

world and to enrich our customer's lives through the unique power of mobile
communication."

Vodafone - India

Vodafone India (previously Vodafone Essar Ltd, Huchison Essar Ltd) is the Indian
subsidiary of the UK-based Vodafone Group plc and a telecommunications service
provider in India, having its operating headquarters in Mumbai. Vodafone India has a
market share of 21% as of March 2018, and after merging with Idea, the Vodafone Idea
network now has around 375 million members, making it India's third-biggest cellular
mobile provider.

The advent of Jio in the Indian telecom business in 2016 prompted a flurry of mergers and
corporate restructuring. In March 2017, it was reported that Idea Cellular and Vodafone
India will be consolidated. In July 2018, the Department of Telecommunications approved
the merger. The Vodafone-Idea merger received final approval from the National Company
Law Tribunal on August 30, 2018. On August 31, 2018, the merger was finalized, and the
newly formed company was named Vodafone Idea Limited.

As per September 2021 data, Vodafone Idea Limited is the third-largest mobile
communication network in India on the basis of the number of subscribers. The Vodafone
Group owns 45.2 percent of the merged firm, the Aditya Birla Group owns 26 percent, and
the remaining shares are held by the general public.

29
Vodafone - Products and Services

Vodafone is well known as a mobile service provider, but there are many more categories
that Vodafone has entered into. Vodafone offers broadband and wifi services. Another
popular service is Vodafone TV. Vodafone TV has been designed to offer an all-round
entertainment option to the viewers. On Vodafone TV, viewers can access live TV, Video
on Demand and can also access platforms like Netflix and Amazon Prime Video. Vodafone
TV comes with attractive features like Ultra HD picture quality, intelligent voice search
and smart replay of games, etc.

Vodafone released Vodafone 360, a new internet provider for mobile, PC, and Mac, in
October 2009. After low hardware sales, this was canceled in December 2011. This
followed the resignation of the Director of Internet Services in September 2010, who
tweeted, "5 days until I leave Vodafone, freedom beckons." Vodafone launched, Vodafone
150, which is the world's cheapest mobile phone, in February 2010. Vodafone intended to
sell 'Vodafone 150' for less than $15 (£10) in underdeveloped countries. It began in India,
Turkey, and eight African countries, including Lesotho, Kenya, and Ghana.

Some other services offered by Vodafone are -

• Payment through mobile phone - Safaricom, Kenya's biggest mobile

communication operator and a Vodafone joint venture, released
Vodafonedeveloped digital payments software in March 2007. M-PESA, Kenya's
mobile money transfer service, had 1.6 million users by February 2008. By 2011,
there were fourteen million M-Pesa accounts, with 40% of the country's savings
saved in them. Vodafone launched a global collaboration with Visa in February
2012.
• Health Services - Vodafone launched a newly developing market sector in
November 2009 (the application of mobile communications and network
technologies to healthcare). Several of its early accomplishments is the Novartisled
"SMS for Life" project in Tanzania, for which Vodafone designed and developed a
message-based system that allows all of Tanzania's 4,600 public healthcare
facilities to report their levels of anti-malarial medications so that accurate
30
 inventory data can be seen centrally in legitimately, allowing for quick and efficient
re-supply of stock.

• Vodafone Foundation - With the tagline "Connecting for Good," the Vodafone
Foundation is a well-known charity that supports and initiates programs that
employ mobile technology as a means to assist the needy. They frequently
collaborate with other philanthropic organizations.

1.11 Vodafone - Business Model and Revenue Model

Various economic variables have an influence on the industry's enterprises, including high
infrastructure costs, price wars in various market forces, and enmeshed mobile telephony
sector, and government restrictions. Government laws, such as the recent Vodafone-Hutch
transaction, which the Indian government sanctioned for tax evasion. Vodafone uses a mix
of segmentation tactics to divide its mobile network services, enterprise services, and
internet services. It makes use of geographic, demographic, and psychographic
segmentation.

Coming to Vodafone's revenue model, a huge chunk of Vodafone's revenue comes from
selling mobile data, voice, financial services, and messaging services to individual and
enterprise customers. Vodafone also makes money by offering various other services like
cloud and hosting, cyber security solutions, remote working solutions, IoT related services
and more to the enterprise customers. As per 2019- 20 reports, the company is aiming to
diversify its revenue streams further in segments like financial services, IoT, digital
services and enterprise.

As per some reports, Vodafone's mobile networks, which allow consumers to call, text, and
download files, account for about 70% of its revenues and even more of its earnings.
Fixedline services, which include internet, TV, and voice, make for the majority of the
remaining revenue.

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Vodafone - Investments

Vodafone has made 25 investments in total. Below are some of the recent investments
made by Vodafone.

Vodafone - Competitors

Vodafone's top global competitors are : AT&T, BT, Orange, Telefonica, Deutsche
Telekom, Telstra, Tata Communications, Nippon Telegraph and Telephone Corporation,
Liberty Global and Telefonica Colombia.

Vodafone's top competitors in India are Bhart Airtel, Reliance Jio, Tata Communications,
etc.

Vodafone - Challenges Faced

Vodafone's business will almost certainly continue to be hampered by tough regulatory

frameworks and adverse demographic trends in its major European countries, particularly
in Spain and Italy, which account for over 25% of revenues and have some of the weaker
fundamentals.

Meanwhile, Vodafone's capital allocation history does not bode well for the company's
M&A (Merger & Acquisition)plan. Since 2009, Vodafone has incurred more than $50
billion in impairment charges, which reflect the fact that an acquired asset is currently
worth less than what Vodafone paid for it.

Vodafone is one of the major telecommunications businesses in the world, having a strong
presence in its main European countries. However, due to its increased fragmentation and
fewer business-friendly authorities, this is a challenging region to compete in when
compared to America.

In light of Vodafone's need to continue deleveraging and invest substantially in 5G,

cautious income investors may choose to avoid the stock in favor of more stable telecom

32
companies like Verizon (VZ), which have more obvious routes to profitable long-term
development.

In India, Vodafone is burdened by huge dues. In total Vodafone Idea has total debt of ₹1.92
trillion, which includes AGR dues, Spectrum-related dues, and bank loans. Stiff
competition from reliance JIO is another major challenge Vodafone (Currently Vodafone
Idea) is facing in India.

Vodafone - Future Plans

In the March quarter, Vodafone Idea recorded a net loss of Rs 7,022 crore and net debt of
Rs 1.7 lakh crore.

"Financial performance has impacted its ability to generate the cash flow that it needs to
settle/refinance its liabilities and guarantees as they fall due," the company said, "which,
combined with its financial condition, is resulting in material uncertainty that casts
significant doubt on the Company's ability to make the payments mentioned therein and
continue as a going concern."

Vodafone Idea stated in a statement that it is undertaking 5G testing in the cities of Pune
and Gandhinagar, utilizing spectrum authorized by the government.

With its equipment partners in Gandhinagar and Pune, the telecom claimed to have reached
peak download rates of 1.5 Gbps utilizing the 3.5 GHz spectrum.

Jagbir Singh, CTO at Vodafone Idea, said, “We are pleased with the speed and latency
results in the initial stages of the 5G trials on the government allocated 5G spectrum bands.
Having established a robust 4G network pan-India, delivering fastest 4G speeds and a
5Gready network, we are now testing the next generation 5G technology to be able to bring
a truly digital experience for enterprises and consumers in India, in the future.”

However, despite all its efforts, 'Vodafone Idea' is not in a good position in India. As
expressed by Vodafone Group CEO Nick Read, the company has no plans to infuse fresh
funds into the 'Vodafone-Idea' Venture.

33
In its fiscal Q4 and full 2021 earnings statement, Vodafone Group stated that it will focus
on growing as "a new generation connectivity and digital services provider” for Europe and
Africa.

The Covid 19 pandemic has proved yet again that connectivity and digital services are
crucial to society and Vodafone Group is ready to grab the opportunities that the Covid
situation has created in the field of connectivity and digitization.

As per Vodafone CEO Read, the company is targeting revenue growth and disciplined
capital allocation. It is also working on bringing down operating costs by 20% across its
European and central Units by the end of the financial year 2023.

Vodafone - FAQs

What does Vodafone do?

Vodafone (based in Newbury, the United Kingdom) is a telecommunication services firm

that provides phone, text, and data services via mobile and fixed networks, as well as fixed
broadband and television services, cloud and hosting, internet protocol-virtual private
network services, roaming, and unified communications services.

Who founded Vodafone?

Vodafone was founded by Ernest Harrison and Gerry Whent in 1985.

When was Vodafone founded?

Vodafone was founded by Ernest Harrison and Gerry Whent in 1985.

How does Vodafone make money?

Vodafone's mobile networks, which allow consumers to call, text, and download files,
account for about 70% of its revenues and even more of its earnings. Fixed-line services,
which include internet, TV, and voice, make for the majority of the remaining revenue.
Which companies do Vodafone compete with?

34
Vodafone's top global competitors are : AT&T, BT, Orange, Telefonica, Deutsche
Telekom, Telstra, Tata Communications, Nippon Telegraph and Telephone Corporation,
Liberty Global and Telefonica Colombia.

Vodafone's top competitors in India are Bhart Airtel, Reliance Jio, Tata Communications,
etc.Vodafone Idea is an Indian telecom company formed as a result of a merger between
Vodafone India and Idea Cellular in 2018. The company has been facing financial
difficulties due to intense competition in the Indian telecom market, as well as huge debt
and regulatory payments.As of December 2021, Vodafone Idea had a subscriber base of
around 240 million, making it the third-largest telecom company in India.

The company has been losing subscribers in recent years, partly due to its inability to match
the aggressive pricing strategies of its rivals. In 2021, the company reported a net loss of
Rs 46,045 crore (approximately $6.2 billion), which was one of the largest losses ever
reported by an Indian company.

Vodafone Idea has been in talks with the Indian government to get relief on its AGR
(Adjusted Gross Revenue) dues, which amount to around Rs 62,000 crore (approximately
$8.3 billion).The company has been raising funds through various means, including rights
issues, private equity investments, and asset sales, in order to reduce its debt and improve
its financial position.

Despite the challenges, Vodafone Idea continues to operate and has been investing in its
network to improve its coverage and services for its customers.In December 2021, the
company launched a new brand identity and renamed itself as Vi (pronounced "we"), as
part of its efforts to reposition itself in the market. The future of Vodafone Idea remains
uncertain, and it is unclear whether the company will be able to overcome its financial
challenges and regain its position in the Indian telecom market.

Vodafone Idea Limited, commonly known as Vi, is an Indian telecommunications company

formed as a result of the merger between Vodafone India and Idea Cellular in August 2018.
Vi is headquartered in Mumbai, India, and is the third-largest telecom operator in India
with a subscriber base of approximately 240 million as of December 2021. The company

35
operates in all 22 telecom circles in India and provides a range of services including voice,
data, and digital services.

Financial Performance:

Vodafone Idea has been facing significant financial difficulties due to intense competition
in the Indian telecom market, as well as huge debt and regulatory payments. The company
has been losing subscribers in recent years, partly due to its inability to match the aggressive
pricing strategies of its rivals. In 2021, the company reported a net loss of Rs 46,045 crore
(approximately $6.2 billion), which was one of the largest losses ever reported by an Indian
company. The company's revenue has also been declining, and it reported a
9.7% YoY decline in revenue in Q3 FY22.

Debt and AGR Dues:

Vodafone Idea's financial troubles are largely due to its massive debt and regulatory
payments. The company's total debt stood at Rs 1.8 lakh crore (approximately $24 billion)
as of September 2021. The company has been in talks with the Indian government to get
relief on its AGR (Adjusted Gross Revenue) dues, which amount to around Rs 62,000 crore
(approximately $8.3 billion). AGR is the basis on which the Indian government calculates
the annual license fee and spectrum usage charges that telecom operators have to pay.

Fundraising:

Vodafone Idea has been raising funds through various means, including rights issues,
private equity investments, and asset sales, in order to reduce its debt and improve its
financial position. In September 2021, the company raised Rs 7,500 crore (approximately
$1 billion) through a rights issue. In October 2021, the company raised Rs 5,500 crore
(approximately $735 million) through a private equity investment from Oaktree Capital.
The company has also been selling off non-core assets, such as its data center business, to
raise funds.

Network and Services:

36
Despite its financial difficulties, Vodafone Idea continues to operate and has been investing
in its network to improve its coverage and services for its customers. The company has
been deploying new technologies such as Massive MIMO, Dynamic Spectrum Refarming,
and Voice over Wi-Fi to enhance its network capabilities. The company has also been
rolling out new digital services such as Vi Movies & TV, Vi Caller Tune, and Vi App Vault
to provide a more comprehensive digital experience to its customers.

Rebranding:

In December 2021, Vodafone Idea launched a new brand identity and renamed itself as Vi
(pronounced "we"). The new brand identity is part of the company's efforts to reposition
itself in the market and focus on customer-centricity. The company has also introduced a
new tagline, "Together for Tomorrow," to reflect its commitment to building a better
tomorrow for its customers.

Background:

Vodafone Idea is an Indian telecom company that was formed in August 2018 as a result
of a merger between Vodafone India and Idea Cellular. The merger was aimed at creating
a stronger player in the Indian telecom market to compete with rivals such as Reliance Jio
and Bharti Airtel.

Market position:

As of December 2021, Vodafone Idea had a subscriber base of around 240 million, making
it the third-largest telecom company in India. However, the company has been losing
subscribers in recent years, partly due to its inability to match the aggressive pricing
strategies of its rival

Financial challenges:

Vodafone Idea has been facing significant financial challenges in recent years. The
company has been struggling to pay off its debt and regulatory payments, including
Adjusted Gross Revenue (AGR) dues of around Rs 62,000 crore (approximately $8.3

37
billion). In 2021, the company reported a net loss of Rs 46,045 crore (approximately $6.2
billion), which was one of the largest losses ever reported by an Indian company.

Government relief:

Vodafone Idea has been in talks with the Indian government to get relief on its AGR dues.
In September 2021, the Supreme Court of India gave the telecom companies 10 years to
pay their AGR dues, with an initial upfront payment of 10% required by March 2022.
However, Vodafone Idea has been struggling to make the upfront payment due to its
financial difficulties.

Network investment:

Despite its financial challenges, Vodafone Idea has been investing in its network to improve
its coverage and services for its customers. The company has been rolling out 4G services
across India and has also launched its 5G trial network in Pune.

Uncertain future:

The future of Vodafone Idea remains uncertain. The company continues to face significant
financial challenges, and it is unclear whether it will be able to overcome them and regain
its position in the Indian telecom market. The company's ability to make the upfront
payment for its AGR dues by March 2022 will be a key factor in determining its future.

Company Overview:

Vodafone Idea Limited is an Indian telecommunications company that was formed in

August 2018 as a result of a merger between Vodafone India and Idea Cellular. The
company provides mobile services in India under the brand name "Vi". It is headquartered
in Mumbai and is listed on the National Stock Exchange of India and the Bombay Stock
Exchange.

Industry Overview:

38
The Indian telecommunications industry is highly competitive, with multiple players vying
for market share. The industry is dominated by Reliance Jio, followed by Bharti Airtel
Vodafone Idea. The industry has witnessed significant disruption in recent years, with the
entry of Reliance Jio in 2016 leading to a price war and consolidation in the industry.

Financial Performance:

Vodafone Idea has been facing significant financial difficulties since the merger in 2018.
The company has been struggling to generate profits due to intense competition and huge
debt and regulatory payments. In the financial year 2021, the company reported a net loss
of Rs 46,045 crore (approximately $6.2 billion), which was one of the largest losses ever
reported by an Indian company. The company's revenue for the same period was Rs 39,137
crore (approximately $5.3 billion), a decline of 10.3% compared to the previous year.

Subscriber Base:

As of December 2021, Vodafone Idea had a subscriber base of around 240 million, making
it the third-largest telecom company in India. However, the company has been losing
subscribers in recent years, partly due to its inability to match the aggressive pricing
strategies of its rivals. The company's market share has also been declining, with Bharti
Airtel and Reliance Jio gaining ground.

Debt and AGR Dues:

Vodafone Idea's financial troubles have been exacerbated by its huge debt and regulatory
payments. The company has a debt of over Rs 1.8 lakh crore (approximately $24.4 billion)
and has been struggling to service its interest payments. The company's regulatory
payments, which include license fees and spectrum usage charges, have also been a
significant burden. The company has been in talks with the Indian government to get relief
on its AGR (Adjusted Gross Revenue) dues, which amount to around Rs 62,000 crore
(approximately $8.3 billion).

Fundraising and Asset Sales:

39
Vodafone Idea has been raising funds through various means to reduce its debt and improve
its financial position. In 2019, the company raised Rs 25,000 crore (approximately $3.4
billion) through a rights issue. The company has also been in talks with private equity firms
to raise funds. In addition, the company has been selling its non-core assets to raise funds.
In November 2021, the company sold its data center in Navi Mumbai to Hiranandani Group
for Rs 3,760 crore (approximately $507 million).

Network and Services:

Despite the challenges, Vodafone Idea continues to operate and has been investing in its
network to improve its coverage and services for its customers. The company has been
expanding its 4G network and has also launched 5G trials in select cities. The company has
also been focusing on improving its customer service and has introduced new plans and
offers to attract and retain customers.

Brand Identity:

In December 2021, Vodafone Idea launched a new brand identity and renamed itself as Vi
(pronounced "we"), as part of its efforts to reposition itself in the market. The new brand
identity represents the company's vision of being a "digital telco of the future". The
company has also introduced a new tagline, "Together for Tomorrow", which reflects its
commitment to building a better future for its customers and stakeholders.

40
Idea Cellular was an Indian telecommunications company that operated in the highly
competitive Indian telecom market. It was one of the largest telecom companies in India
before its merger with Vodafone India in 2018 to form Vodafone Idea. In this black book,
we will examine the history, challenges, and future prospects of Idea Cellular.

History:

Idea Cellular was founded in 1995 as Birla Communications Limited. In 2002, the company
was renamed as Idea Cellular and became a part of the Aditya Birla Group. Over the years,
the company grew rapidly and became one of the largest telecom companies in India.

Challenges:

Idea Cellular faced significant challenges in the highly competitive Indian telecom market.
The company struggled to keep up with the aggressive pricing strategies of its competitors,
particularly Reliance Jio. In addition, the company had a large debt burden, including
spectrum fees and regulatory payments.

41
Recent Developments:

In 2018, Idea Cellular merged with Vodafone India to form Vodafone Idea. The merger
was aimed at creating a larger company with the scale to compete in the highly competitive
Indian telecom market. However, the merged entity has faced significant financial
challenges since its inception.

Future Prospects:

As a standalone company, Idea Cellular no longer exists. However, as part of Vodafone

Idea, the legacy of Idea Cellular lives on. The future of Vodafone Idea remains uncertain,
with the company facing significant financial challenges and intense competition in the
Indian telecom market.If Vodafone Idea can manage its debt and find a way to differentiate
itself in the market, it may be able to regain its position as a leading telecom company in
India. However, if the company is unable to find a solution to its financial challenges, it
may face bankruptcy or be forced to merge with another telecom company.

Idea Cellular was one of the largest telecom companies in India before its merger with
Vodafone India to form Vodafone Idea. The company faced significant challenges in the
highly competitive Indian telecom market, including intense price competition and a large
debt burden. As part of Vodafone Idea, the legacy of Idea Cellular lives on, and the future
of the merged entity remains uncertain.

Achievements:

Idea Cellular was known for its innovative products and services. The company was one of
the first to introduce value-added services such as caller tunes and mobile internet. It also
launched several advertising campaigns that were popular among customers.In 2010, Idea
Cellular launched 3G services in India, becoming one of the first telecom companies to do
so. The company also launched 4G services in 2016, which helped it compete with rivals
such as Reliance Jio and Bharti Airtel.

42
Impact on the Indian telecom industry:

Idea Cellular played an important role in the development of the Indian telecom industry.
The company was a key player in the expansion of mobile services to rural areas of India.
It also helped drive innovation in the industry by introducing new products and services.In
addition, Idea Cellular was a major contributor to the Indian economy. The company
created jobs and contributed to the growth of other industries such as advertising and media.

Vodafone and Idea announced their merger in20l'7, which made a huge impact in the
Indian telecom sectc r - - 'major consequence of Jio's cruising dominance in the
industry.VodafoneIndiawasthesecondlargestplayeroftheInd.Industryintermsofsubscriberb
asewhileldeaCellularLimitedhasthethirdlargestsubscriberbaseinlndia was a subsidiary of
Aditya Birla Group. This merger did not only create a telecom giant but has had for the
industry services, the staffand consumers as well as it pushed more merger moves in the
telecom s 'paper, the current scenario ofIndian telecom market is also analyzed to
understand where Vodafone-Idea Key Words: Mergeq Vodafone, Idea, Telecom
Industry'IntroductionAmergerisadealcarriedoutbytwoormorecompaniesbygroupingitintoa
singlenewentity.Thereari of mergers and also several reasons as to why companies resort
to merging with their competitors. carried out to expand a company's reach, diversifu their
portfolio, or gain market share. This is all done to up h: shareholders in the company and
create value. There can also be a merger, where companies operating in sector become
one entity which is called as horizontal merger. It is basically a piece of consolidation
benvee providing the same services orproducts. This kind of mergers are commonly
observed in organization itheir objective is to make a larger business with larger
economies of scale and market share, since there competition that exists between these
fewer companies.On 20th March, 2017 Board of Directors of Vodafone India and Idea
jointlyannouncedapprovalofthemergerwasgivenbyDepartmentofTelecommunicationinJul
y20ls.TheNationalCompany La"'- T:.gave the final approval to the Vodafone-Idea merger
on August 30, 2018. On 31st August 2018, the merger \\'3S it-:.nfand the Board of
Directors decided to name their newly merged entity as Vodafone Idea Ltd. The
43
Vodafone-Idea .headed by Kumar Mangalam Birla as the Chairman, with CEO of the
company as Balesh Sharma. On analysis of marke :of revenue and subscribers, the merger
made this entity the largest company in Indian telecom sector. Under the termsagreement,
the Vodafone's stake is 45.2Yo of the total market shares in the merged entiry the Aditya
Birla Group stake :,and the rest ofthe shares are held by the public. It was later decided
that both the brands will continue to operate unde:ongoing brand names.Vodafone Idea
Limited became a Pan-Indian integrated GSM operator providing 2G, 3G & 4G mobile
services undernames of Vodafone and Idea. Vodafone Idea merger created a wave across
the telecom industry of India' It u'as a ,reaction to the competition of Reliance Jio and
Airtel. This gave way to a string of mergers and acquisitions b1' th<companies to hold
their position in the telecom sector. The merger also leads to a conversion of multiple
telecom s'provider industry into a three-fold competition between Vodafone-Idea Ltd,
Airtel and Reliance Jio.Objective of the AnalysisL To examine the merger between
Vodafone India and Idea and the specifics of their deal'2.To analyze the impact of the
merger on the Indian Telecom industry"OVER THE HORIZON: INTROSPECTING THE
SELF IN FLUX o26

Specifics about the MergerThe merger includes different percentage ofshares for Vodafone
and Idea while the rest belongs to the public
shareholders'Approximately'vodafonewillhave
+s.t"l"ofsharesofjointventureuft"rpu.ringtheownership of4.9%otoAdityaBirlaGroup for
3'900 crore post the completion of merger. The requisites for the merger was that, it
required approval from boththe tele com service providers for the appointment of cEo una
coo. The chairman of the merged entity would be KumarMangalam Birla and chief
financiat otic". would be appointed uv voauron". From a total of 1-2 -e-b"r. of the Board,
3members each would be nominated by the promoters and rest of the members would be
independent. Vodafone India andIdea Cellular Ltd madecompleted and the joint
filTff:1ff:ff,,l"+:Jh;"iffi within 24 months. on 31st August 2018 the merser wasGraph l:
Financial Consolidation,Af,&,.mergersindia.comThis transaction required various
approvals from government authorities including SEBI, dept. of relecom and
ReserveBank of India among others' The Depaiment of Tellco-- has given the green signal
for the merger of"bdafone India and Idea, the largest Merger and Acquisition agreement

44
in the sector, which has displaced Bharti Airtel from:"p position after over 15 years' The
approval conditions, *hi"h *"." given over a year afterthe agreement, were an-:"unced in
March 2017 which includJan advance payment of Rs 7,268 crore. The demand is split
between espectrumchargesandcashorRs 3,e26croreb,vPromotersAditya Birla Group
infused Rs 3,250 crore in Idea cellular, which separately raised Rs 3,000 crore ahead of a:
'anned merger with vodafone India' Followinc tl: equity infusio., promoters, iheir stake in
India,s third large st::lecom operator rose to 47 '2%io from 42.4Yorroi'' Id"u contributed
its assets which included standalone towers with 15,400:enancies and a stake in Indus
towers Ltd of ll -5%. The proposed capital raising by ldea, the sale of its standalone
towers:: American Tower corp' and the potential sale of its I l.l5%'ttut" ininars Towers Ltd
had augmented the firm,s long-term:apital resources.ilctrumOVER THE HORIZoN:
INTROSPECTING THE SELF IN FLUX o27

Leading Indian Mobile OperatorsSource: mnacritique.mergersindia.comThe entry of

Reliance Jio Infocomm Ltd in September2016,with free seryices for almost seven months
and cheap L:rhad eroded margins and impacted the revenue of rivals. The contribution of
Vodafone will be Vodafone India altrn5"standalone towers with 15,400 tenancies without
including 11.5% stake in Indus Towers. According to the agr:e:between Idea and
Vodafone, Vodafone India's funding and contribution of net debt to the merger will depend
upon nelof Idea Cellular upon completion of merger. Vodafone will contribute more
amount of net debt, about Rs 2,480 cror"e rh:r-at the completion of the merger. Post
termination of both companies, the combined entity will be a joint venrure b::;Vodafone
and Idea, which will account for the under equity method, controlled by bothAditya Birla
Group and \iria:Idea promoters hold the rights to acquire 9.5% additional stake
fromVodafone under agreed dealto equalize sharehcljover time as per the following
propositionVodafone: 45.1% - 9.5%: 3 5.6%Idea: 260/o + 95% : 35.6%Table I :
Shareholding ChangeSource: mnacritique.mergersindia.comReasons for the MergerThe
main reason for the Vodafone-Idea merger was to tackle the rising dominance of Reliance
Jio in the Indian Tel'sector. This will result in a brutal price war between all the major
companies in this sector.While merging companies are typically quite confident about their
synergy benefits, most analysts agree thrVodafone-Idea merger holds the potential for
significant cost savings. With a larger scale and elimination of duplicate 'margins can rise

45
substantiallys Aditf i TcttlAcgrisition from1:ndafon*Post Adig.a GrowgAcquiritiot rr$
r!€rg€rfrom l,,"adafontOVER THE HORIZON: INTROSPECTING THE SELF TN
FLUX o28

Kalinga UniversitvThe combined entify became the largest cellular services operator in
prominent circles. In a couple of circles, it willupstage BhartiAirtel as the number one
operatoq while in some other circles, it will graduate to a strong No. 2. It remains tobe
seen that if the combined entify will retain a half-hearted presence in the relatively smaller
circles, or whether it will up theante and aim for a strong Pan-India focus.The spectrum
of Idea in two circles while vodafone India in seven circles, whose permits are valid till
2021-22,is togethervalued at around Rs 12,000 cr as per the last auction price. These
permits with Vodafone India and Idea are not in commoncircles hence there could be
potential spectrum capital expenditure synergies between the
companies.Beforethemerger,amarketsharesofl8.l6%ofvodafonelndiawith20,46,g0,000cust
omersandamarketshare of16.g%oof Idea CellularLtd with 19,05,10,000 customers was
suleyed" The merger of Vodafone India and Idea Cellular has boostedthe market share to
35% which has made it the country's largest telecom operation leaving the Bharti Airtel
off its topposition.Impact of MargerThis merger has caused more mergers and acquisitions
of other telecom companies. The assets of Telenor India andReliance Communication were
bought by Bharti Airtel. Tata Teleservices customers have started migrating to the
Airtelnetwork under an Intra circle Roaming (ICR) anang€ment. various initiatives have
been taken by th! merler entity likerenewal of price due to troublesome entry of Reliance
Jio which caused some serious imbalance. The huge number ofsubscriber base in India has
made India the fastest growing market and with the merging of huge telecom players it
willendow the telecom sector with health and life. The merger provided support in
ou.rcornirrg the debt of Idea cellular andr'bdafone India and large sum of credit will be
infused in the joint venture. Impact of mergei could be observed in various;en'ice providers
in terms of quality of service in telecom sector. This impact could aiso be observed on the
savings,'r nergies and the spectrum in rapid growth. Cost and capex synergies is created for
both companies which is estimated to:e around l0$ billion after integration cost. The major
cost and would be around network infrastructure,iavings in energy costs, operational
efficiencies, service centres, lower maintenance expenses. The merger has reduced the
46
peration cost incurred to about 60% of the total cost which will aid in improving the and
performance of the service:rovided by the company.Subscrlber Merket Shere
SubscriberMarket Share the merger, Bharti Airtel will be left behind by the Vodafone
Idea Ltd and the merged entity will acquire the topr': silion in Indian telecom industry
with a revenue market share of40olo with respect t
oBha/1.lirtetlzN.\\rith the disruptive entry of Reliance Jio, it was the beginning of price
war in the Indian telecom industry. Reliance Jio:rade an announcement that for the start
of Jio telecom services on 27th December 2015 at minimum rates with a launch offer' :
:'irst quarter free for all the consumers. Since the merged entity had enough resources it
resulted in a resource consolidahich ultimately brought a greater benefit to consumer.very
few companies remaining in the sector, there was a higher chance of stability of prices.
Analysts are predicting: correction of telecom pricing and the country may see the
companies teaming op to the prices of all*-' ices' With only 4 major players remaining:
Idea-Vodafone, Airtel, BSNL and lnirtel has merged Aircel, bought- and may merge
with Tata), rates of these services would be a something which can be arbitrated easily.\s
big agencies offer better consumer experience, it cannot come at a cheap price. If we talk
about the telecom market,OVER THE HORIZON: INTROSPECTING THE SELF IN
FLUX o29

Kalinga Universitythen it is better for the industry as a whole. The current debt of the
merged entity is at a staggering Rs 1.07 Lakh cr, and Ideahas already announced that they
would be conserving close to Rs 14,000 crore per year from savings, due to
unitedexecution and shared usage of infrastructure. Lower affears mean the companies can
now focus more on in improving theexisting infrastructure, which means a better network
quality for the consumers.: Market Revenue ShareThe Vodafone Idea merger resulted in
a duplication of resources across the country which required job cuts too. Thecombined
entity had to lay offtheir employees on a huge scale, as Chairman of the new merger,
Kumar Mangalam Birla, hadalready pointed towards it. When the main objective of both
the telecom firms is to reduce their indebtedness via merger,then the cut downs were pretty
much expected. Although the CEO of Vodafone hadn't hinted towards layoffs, but
analystspredicted that 5-l0oh of the labor pool from the merged entity may be asked to
resign.The merger lead to pooling of vital resources and infrastructure, which inevitably

47
lead to a better service quality andcustomer experience. This merged entity has also
reduced financial challenges, which encouraged it to invest more onquality of
service.Market Revenue Share'i :':iAC$*rOVER THE HORIZON: INTROSPECTING
THE Sf,LF IN FLUX e30

Kelinsa Unir-ersinThe ExpectationsThe merger befween Idea and Vodafone India has
made them a leading player. As per the benefits that arise fromT-enasement synergies is
Rs 670 billion for cost and capital expenditure & Rs 140 billion operating expenses by the
4th year.l: also decreased the debt on the Vodafone-Idea Ltd with sale of Towers Assets.
The merger will also lead to cost savings::d asset monetization opporlunities aiding
financial performance. The big question to be answered is whether the com-:an1' rvill be
able to monetize the surplus spectrum and able to stream the money towards newer
technologies and betteri:n ices. The big advantage to the promoters ofAditya group is
that the consolidated with Vodafone in this pricing war withReliance Jio and Airtel at the
same time have rights to gradually increase the stake in stages to become equal
partners..rccording to the current circumstances, there is little to no gain to the public
shareholders and they can only hope that they,r ill be benefited with the merger in the long
term.Eimimishing The great Indian Telecom BattleNot very long ago, India had a booming
telecom industry with a dozen operators battling for market share in this billionuser
market.But three years ago, Reliance Jio entered the sector which rock-bottom tariffs. A
brutal tariffwar started, whichkicked several operators out of the race to provide wireless
services and left many with battle scars. Today, just two otherprivate operators,
BhartiAirtel and Vodafone Idea are left to compete with Jio.}IET MOBILT SUBSCRIBTR

48
 CHAPTER NO. 2: RESEARCH METHODOLOGY

2.1: OBJECTIVES OF STUDY:

 To find out satisfaction level of existing customers.
 To identify issues faced by users on Vodafone.
 To find out the reasons of dissatisfaction of customers via feedback obtained
 To find the expectation of customers from a network operator  To know about strategies
to attracts customers.
 Operation of the V-I network.

2.2: SCOPE OF STUDY:

 To know about various factors which consumer considered for Vodafone operator
 To determine which feature of vodafone website attracts customers or not.
 To know about customers who are positively affected by vi.

2.3: STATEMENT OF PROBLEM:

The statement of problem under study is to analyze the Marketing strategy of vi.

2.4: HYPOTHESIS OF THE STUDY:

The hypothesis of the study can be described here in as under:

H0 - There is no awareness regarding the usage of vi amongst the consumers in the city of
Mumbai.

H1 - There is awareness regarding usage of vi amongst the consumers in the city of Mumbai.

49
2.5: NATURE OF STUDY/TYPE OF RESEARCH:
This is a descriptive and diagnostic type of research where survey method is adopted to collect
primary information from the customers shopping or purchasing through Bigbasket using
different scales as required and the required secondary information for the analysis.

2.6: SAMPLE OF STUDY:

While developing the sampling design for the study, following points will be considered:

1. Sampling unit:
For the required study sampling unit was based on the city base level as far as geographical
aspect was concerned. Customers will be the population under study.

2. Size of sample:
This refers to the number of items to be selected from the universe to constitute a sample. The
population being large the survey was been carried among 100 respondents (approximate).
They will be considered adequate to represent the characteristics of the entire population. It
will fulfill the requirements of efficiency, representativeness, reliability and flexibility.

3.Sampling procedure:
The sampling procedure to be followed in the study was nonprobability snowball sampling.
Simple random procedures were used to select the respondents from the available data base.
The research work was carried on the basis of structured questionnaire. The study was
restricted to Indian citizens and residents of Mumbai city.

2.7: TIME DIMENSION:

The research was a cross-sectional base due to time limitations which allowed take
a snapshot of aspects at a single point of time. The whole research was completed
in a month’s time.

50
2.8: DATA COLLECTION METHOD:
Primary Data:
For the present study, both the Primary data collection method was applied through the
questionnaire method. A questionnaire schedule was prepared and mailed/handed out to
the selected respondents (customers) through Google Forms. The respondents were
requested to answer the questions and return the questionnaire. Thus, the primary data was
collected through a survey method.
Secondary Data:
Secondary data was collected through various websites and articles on internet.

2.9: TECHNIQUES USED FOR DATA PRESENTATION:

Quantitative method is used to explain and predict phenomenon with measurable variables.
The analysis of data collected is completed and presented systematically with the use
of Microsoft Excel and MS- Word.
The various tools used for presentation of data are:
1. Bar graphs
2. Pie charts
3. Column graphs

2.10: LIMITATIONS OF THE STUDY:

There were certain limitations of this study that are enlisted below:
• Resources of the researcher were limited whereby the customers spread all
over the country could not be studied.

• Geographical expansion of target population, as we know that the Vi users are located
throughout the country.

• Time of submission, due to academic schedule the researcher had the limited time frame
of a week to complete this research.

• The findings of the current study were applicable only to the VI users in Mumbai.

51
• The study was restricted to 100 respondents, which was a very small number to generalize
the findings for the whole population.

• This study describes the characteristics that do not provide answers.

52
 CHAPTER NO.3: LITERATURE REVIEW

Lane et al.(2002) studied about Myths and reality in telecom industry.This paper investigates how
market participants react to mergers and acquisitions (M&As) involving telecommunications
industry.The empirical evidence suggests that such activities convey bad news to the market. This
is consistent with the synergy trap hypothesis and extant empirical findings of value-reducing
diversification strategies in recent literature and used Sample Selection Procedure and Empirical
Model for Residual Analysis. To see validity of the recent wave of M&As in the
telecommunication industry by providing evidence to suggest that synergy and shareholder’s
market value creation are not necessarily associated with M&As. Nalwaya& Vyas (2009) analyzed
how impact on merger of Vodafone and Hutchison essar .And analyzed earning and dividend both
grew after .At that time there were rapid changes in economic environment and technology.The
result of merger was positive & used some Ratio analysis and T-test .It was based purely on
secondary data which are taken from the financial statements of the case through Internet only.
Goyal and Joshi(2012) studied about case study of ICICI bank ltd after 9 banks acquiring with
ICICI bank .It is the largest private sector bank in India, which has acquired nine financial firms
to make the steps of the ladder of success & growth of ICICI bank ltd.To calculate some ratio and
secondary data in form of Annual report. Main problem was the post-merger integration process
is a difficult and complex task. It comes along with long lists of activities and tasks that have to be
fulfilled within a short time and partly with incomplete information. Saraswathy(2010) research
about cross border merger and acquisition in India. And studied about The corporate sector all
over the world is restructuring its operations through mergers and acquisitions in an unprecedented
manner in order to successfully overcome the challenges posed by globalization. And to
understand the nature, extent and structure of these deals in India. She used secondary data with
the help of financial report . The problem was The post-merger integration process is a difficult
and complex task. It comes along with long lists of activities and tasks that have to be fulfilled
within a short time and partly with incomplete information. Ghosh and Dutta(2014) studied about
Merger and Acquisition is a strategic tool for restructuring in the Indian Telecom sector .And to
explore the overall strategic impact of M&A in the telecom industry. Used some paired
Ttest,secondary data like business daily,ministry of statistics and programme
Implementation(MOSPI) and used some ratios. The problem could not be ascertained from the
53
available data whether a broad based, rigorous due diligence procedure was undertaken covering
not only financial issues but also employee related issues. As a result, the merged entities might
have encountered cultural problems during the integration period. Lane et al.(2017) studied about
the impact of Reliance Jio on Indian mobile industry- A case study on mergers and acquisitions of
idea –Vodafone and Airtel – Telenor. Indian mobile industry is one of the fastest growing
industries in the world. In the world India is second largest market for mobile service providers
and it is a good avenue for network providers from indigenous and exogenous entrepreneurs.
Analyzed Michael porter’s 5 forces model. And used secondary data. Kim &Singal(1993) studied
that Mergers and Market Power: Evidence from the Airline Industry.And to examines price
changes associated with airline mergers during 1985-1988 .And used sample study like they used
14 airline industry data through wall street journal index ,Merger and acquisitions. CRSP( Center
for research in securrity prices) stock files. The problem was to used sample data so there were not
used whole airline industry. Lane et al(2013) analyzed to Merger and acquisitions in the high-tech
industry. As a result of the impressive wave of M&A in recent years operations that were
traditionally considered to extraordinary have become common business development option.
Focuses on technology driver sector . The critical examination of the innovation and value creation
processes in M&As in high-tech sectors. The problem was to focus only technology sector. Lane
et al(1998) analyzed to effect of Bank mergers and Acquisitions on small business leading. Studied
about empirical analysis of the vast majority of U.S bank . The static effects of consolidation which
reduce small business lending are mostly offset by the reactions of the other banks in the market.
Golbe and White(1988) Analysis of Mergers and Acquisitions in the U.S economy. A time series
on merger and acquisitions should be comprehensive and consistent and should containd data that
cover a long period of time & used some secondary data
Khemani (1990) Both internal and external factors are very much responsible for mergers and
acquisition. Scherer (1988) This study concluded that mergers doesn’t always result in profitability
of the company. Mueller (1980) This study said that more profits are earned in conglomerate
Mergers & Acquisitions as compared to horizontal and vertical Mergers & Acquisitions. Kruse,
Park and Suzuki (2003) It reveals that postmerger operating performance increases as compared
tobetween pre and post-merger performance. Prahalad and others (1977) More number of
companies in private and public sector in India has so much diversity, which resultsin more number
of mergers and acquisitions. Beena (1998) Study shows that no significant difference can be found
54
in the profit margin and return between the pre and post mergers. Mantravedi and Reddy (2008)
No matter of the diversity of industries India has there is no significant change in the profitable
index of subsequent mergers.
Kumar and Most of the study on Rajib (2007) merger and acquisition is because of the competition
in the market. Aggarwal arid Jaffe (1996) Technique designed to study the shareholder’s return
via Mergers and Acquisitions. George (2007) Nil evidence found on the time limit to study the
impact of mergers and acquisitions. Krishnamurti and Vishwanath, (2010) Need for practical
measures so as to study impact of mergers and acquisitions as the ratio of these are increasing at a
higher rate in India. Dasgupta (2004) Most of the reforms in India are cause of mergers because
of the economic reforms initiated in 1990’s. Kale and Singh (2005) MNC’s acquirer in India in
19982002 have higher return in equity market than those of domestic Indian market. Rani et al.
(2010) Observed that the main objective of mergers in India during 2003–2008 was to take benefit
of synergies including expansion, increased profitability, etc.
CMA(Dr.)Ashok Panigrah, NMIMS University, 15 Jan 2020 The research paper identifies impact
of post-merger which reflects That merger has caused more mergers and acquisitions of other
telecom companies. The assets of Telenor India and Reliance Communication were bought by
Bharti Airtel. Tata Teleservices customers have started migrating to the Airtel network under an
Intra Circle Roaming (ICR) arrangement. Various initiatives have been taken by the merger entity
like renewal of price due to troublesome entry of Relia nce Jio which caused some serious
imbalance. The huge number of subscriber base in India has made India the fastest growing market
and with the merging of huge telecom players it will endow the telecom sector with health and
life. The merger provided support in overcoming the debt of Idea Cellular and Vodafone India and
large sum of credit will be infused in the joint venture. Impact of merger could be observed in
various service providers in terms of quality of service in telecom sector. This impact could also
be observed on the savings, synergies and the spectrum in rapid growth. Cost and capex synergies
is created for both companies which is estimated to be around 10$ billion after integration cost.
The major cost and capex synergies would be around network infrastructure, savings in energy
costs, operational efficiencies, service centres, lower maintenance expenses. The merger has
reduced the operation cost incurred to about 60% of the total cost which will aid in improving the
quality and performance of the service provided by the company. 2. Prof. Jignesh Vidani , L. J.
Institute of Management Studies The research paper identifies impact of post merger which reflects
55
the premerger strategies of both brands under which they analyses ZooZoo strategy of Vodafone
and many more. The case which this paper will discuss is the case of the merger of Vodafone with
Idea. We all are aware that Vodafone acquired Hutch and entered into the Indian Telecom sector
where we saw changes in its services and advertising campaign from Pug to ZooZoos to love
couples to Bala and her wife to the last one Christmas song. The campaign has always focused on
its high network range as well as best services at a minimal cost. After the 4G network the
company’s campaign also focused on the high speed internet services with exciting data packages
at cheaper rat es. As per the deal structure, Vodafone and Aditya Birla Group will hold 50 percent
and 21.1 percent respectively in the combined entity. The case will throw light on the merger of
the Vodafone with Idea creating a best synergy effect to capture the market share. The Case will
also highlight major advertising campaigns of the Vodafone and strategy behind them. 3. Naman
Jain and Sai Srinivas Reddy ,Alliance University,School of Law and Alliance University-Alliance
University The research paper identifies this merger with the Companies Act of 2013 regarding
mergers and acquisitions and their impact on mergers and acquisition. .The document focuses on
the largest merger of Idea Cellular with Vodafone India under the Companies Act 2013, which led
to the emergence of the largest subscriber telephone company in India, replacing Airtel .which had
the largest client in the last 15 years. Based on an analysis of the financial performance and share
prices of the merged entity Vodafone Idea Ltd. However, it appears that the merger did not have
a very positive impact. The likely reason could be fierce competition in the telecommunications
industry, which has almost slowed down companies to make huge profits. Since the Idea Cellular
and Vodafone India merger is a recent event ,the post-merger data only covers a few month. 4. W.
Kittilaksanawong, Sinduja K and aswamy, 12 November 2018 The research paper identifies
Synopsis The Indian telecom market was witnessing a fierce price war, especially from an
aggressive entry of a new player Reliance Jio Infocomm Limited (Jio) with a predatory pricing
strategy. To react to the increasingly intense rivalry and maintain top positions, the second and
third largest telecom operator like Vodafone India and Idea Cellular Limited (Idea) decided to
merge together. The combined entity would become the largest wireless carrier in India. Was the
merger the right competitive strategy for Vodafone India and Idea to fight against the wars? What
synergies could the merger bring about? Given Vodafone India and Idea agreed to maintain their
respective brands after the merger, would the two brands compete and cannibalize each other’s
market share? As the Indian telecom industry was undergoing the liberalization of airwaves, how
56
should the merged entity overcome potential regulatory hurdles? If this mega merger went through,
what could be the impacts on the Indian telecom industry? If not, how should the companies move
forward with the competition? 5. Sarita Agarwal, 3 February 2020 The research paper focuses on
calculating the Altman’s Z score for bankruptcy prediction for the Telecom Service Provider
Industry in India. The modified Z score for non-manufacturing companies is used for analysis. All
the four telecom service providers is considered for analysis.The Z scores for three preceding years
is calculated and analyzed. The research paper states that BSNL is in the gray zone with a Z score
of 2.65 as on 31.3.18. But since the Z score dropped from 2017 to 2018 and unavailability of 2019
annual report and the proposed merger of BSNL with MTNL, the survival of BSNL becomes
doubtful. Bharti Airtel Limited and Vodafone- Idea Limited are in Financial Distress. However,
Reliance Jio Infocomm Z score has shown an improvement in 2018-19 which gives a positive
signal. International Journal of Research Publication and Reviews,

57
 CHAPTER NO. 4 DATA ANALYSIS, PRESENTATION AND
INTERPRETATION

PARTICULAR NO OF RESPONDENTS PERCENTAGE

MALE 53 53.3%

FEMALE 35 35%

PREFER NOT TO 11 11.7%

SAY

INTERPRETATION :

In Reference to the above graph we can conclude that most of the

respondents where Males are 53% amongst them where female and 35%
of the respondents preferred not to say.

58
 Particular No Of Percentage
Respondents
18 – 25 41 41%

26 – 30 21 21
31-35 23 23
36 – above 08 08
20 22 22
23 1 1

INTERPRETATION :
By saying this chart we can interpteste that the greater number of the respondents of this survey
where between 18 – 25 years of age. Second highest number of this where fall between the age 31
– 35 years of age and 26 – 30 year of age. 21 – 25 age group is also average. Res

59
 Particular No Of Percentage
Respondents
45 45%
student
11 11%
Business man
25 25%
employee
16 16%
other
3 3%
Mmc employ
INTERPRETATION
By seeing the above graph,we can interpret that most of the respondents are with the under student
.we can also interpret that most of the respondents are qualified enough that they can read and
understand the website or application there are only 3% respondents who are mmc empoyee

60
 Particular No of Percentage
Respondents
33 33%
10000-50000
20 20%
30000-90000
31 31%
50000-100000
15 154%
More than 100000

INTERPRETATION
By seeing the above graph ,we can interpret that the maximum or a greater number of respondents
are 10000-to 50000 after that 30000-90000 or we can income level comes in majority and the
others fall below accordingly .The other fall below accordingly. The other categories should be
targeted more based on their activities and salary income level

61
PARTICULAR NO OF RESPONDENTS PERCENTAGE
YES 43 43%
NO 33 33%
MAYBE 23 23%

62
PARTICULAR NO OF RESPONDENTS PERCENTAGE

ADVERTISEMENT 33 33%

HOARDING 20 20%

NEWSPAPER 25 25%

MOUTH 21 21%

PUBLICITY

63
 DIMENSION NO OF RESPONDENTS PARTICULAR
LESS THAN 1 MONTH 26 26%
2-6 MONTHS 35 35%
6-12 MONTHS 20 20%
MORE THAN 1 YEAR 18 18%

INTERPRETATIONh shows that around 26% customers find it easy to network through Vodafone
around 35% of them finds moderate to shop and 20% of them find is very easy to network .here
we can see that majority of them found it easy and a smaller number of respondents found it very
difficult .vodafone should focus on how to ease the purchase forevery customer

64
 Particular No of respondents Percentage

Pre-paid 61 61%

Post-paid 38 38%

INTERPRETATION

Above graph shows that 61% of respondents have a pre-paid network for the vi and the
38%of there usin g the postpaid focus on the issues as this can be a possible reason foe less

65
 Particulars No of respondents Percentage
Less than 500 41 41%
500 to 2000 40 40%
More than 2000 18 18%

INTERPRETATION

Vi shouldfocus on all the issueas faced by the customer to increase customer loyalty and
satisfaction there are less than 500 we spend on current network majority of 41% majorly focus
on the issues as this can be a possible reason for more than 2000 less sale

66
Particular No of respondents Percentage

airtel 26 26%

jio 33 33%

vodafonde 25 25%

other 13 13%

Option 2 3 3%

67
 Particular No of respondents Percentage
Very high price value 38 38%
Network issue 38 38%
Limited tariff 23 23%

INTERPRETATION

Vodafone should focus on all the network issues Face by the customer to increase customer loyalty
and customer base more sales and profit .as a result 38% of them faced no issues but vodafone
needs to assure that all the customer get full satisfaction and no issues.

68
 DIMENSIONS NO OF RESPONDENTS PERCENTAGE
LOW 25 25%
MEDIUM 51 51%

HIGH 23 23%

Interpretation

Vodafone should focus on the network range and the product comparison and pricing tactics
which will result in more engagement by customer as well as vi should keep a check at the
other similar and competing network which will result in better networking for customer

69
 NO OF RESPONDENTS PERCENTAGE
Dimension
YES 58 58%
NO 41 41%

INTERPRETATION :

Vodafone idea focus on the people who feel that we have to use the vi recommend otrher that
people show a positive feedback .vodafone should try and enhance the variety of the products as
per customer needs.

70
 Particular No.of respondents Percentage
Very good 40 40%

good 38 38%

satisfy 21 21%
Interpretatio: Above graph shows that majority of customer feels overall performance of Vi but
still 38% of the customers feels unsafe so need to make all of them feel safe to connect with the Vi
of increase the sales and profit of the company

71
CHAPTER . 5 : CONCLUSION AND SUGGESTIONS

Conclusion on Vodafone idea:

As an AI language model, I do not have access to up-to-date or insider information about Vodafone
Idea, and I cannot provide financial or investment advice. However, as of my knowledge cutoff
date of September 2021, Vodafone Idea, one of the largest telecom service providers in India, was
facing significant financial challenges and was struggling to compete with its rivals in the highly
competitive Indian telecom market.

Vodafone Idea had been facing intense competition, declining revenues, and mounting debt for
several years, and the COVID-19 pandemic had further exacerbated its financial troubles. The
company had been losing subscribers to its rivals due to network quality issu… [1:09 pm,
01/04/2023] Krishna Clg Class: Vodafone Idea is a major player in the telecommunications
industry in India, offering a range of services including mobile, fixedline, and broadband to its
customers. In recent years, the company has faced a number of challenges, including intense
competition and mounting debt.

To overcome these challenges, Vodafone Idea will need to implement a strong marketing strategy
that focuses on building brand awareness, improving customer retention, and expanding its
offerings.

One key aspect of this strategy could be to invest in digital marketing, as this can be an effective
way to reach a wider audience and engage with customers in real-time. Vodafone Idea could use
social media platforms, search engines, and other digital channels to promote its services, run…
As an AI language model, I do not have access to up-to-date financial information or insider
knowledge about the company's future plans. However, based on publicly available information, I
can provide some suggestions and observations.

72
Suggestions :

On 30 August 2018, National Company Law Tribunal gave the final nod to the Vodafone-
Idea merger It was completed on 31 August 2018, and the new entity was named
Vodafone Idea Limited, creating the largest telecom company in India by subscribers
and revenue.

Vodafone Idea is a telecommunications company in India that has been facing financial difficulties
in recent years due to high debt and intense competition in the market. The company has been
making efforts to improve its financial position through measures such as raising funds, reducing
costs, and increasing revenue.

73
 BIBLOGRAPHY AND ANNEXTURE

https://www.vodafoneidea.com/content/dam/vodafonemicrosite/docs/pdf/VIL%20Press

%20Release%20-%2031st%20August.pdf

https://www.adityabirla.com/about-us/downloads/Aditya-Birla-GroupProfile.pdf

https://t.me/joinchat/J_0YrBa4IBSHdpuTfQO_sA

"Vodafone India and Idea Cellular successfully merged". Telecom Talk. 14 November
2018. Retrieved 9 July 2019. investor-relations, Vodafone Idea Limited investor support,
Vodafone Idea Limited

Livemint (3 August 2022). "Vodafone Idea names Ravinder Takkar as Chairman,

Himanshu Kapania to step down". mint. Retrieved 12 September 2022.

Jump up to:a b c "Vodafone Idea Limited Consolidated Profit & Loss account, Vodafone
Idea Limited Financial Statement & Accounts". www.moneycontrol.com. Retrieved 7
September 2020.

^ Jump up to:a b "Vodafone Idea Limited Consolidated Balance Sheet, Vodafone Idea
Limited Financial Statement & Accounts". www.moneycontrol.com. Retrieved 7
September 2020.

^ page 17, Page17. "REPORTS" (PDF). VI.

https://economictimes.indiatimes.com/epaper/delhicapital/2023/feb/04/satetfront/centre-
agrees-to-convert-vi-interest-on-dues-intoequity/articleshow/97589363.cms. {{cite
news}}: Missing or empty |title= (help)

vodafoneidea.com
https://telecom.economictimes.indiatimes.com/amp/news/20employees-of-vodafone-
ideas-sales-team-quits-report/97019204. {{cite
web}}: Missing or empty |title= (help

74
References :

• Parbat, Kalyan; Sengupta, Devina (31 August 2018). "NCLT gives

goahead to Idea-Vodafone merger". The Economic Times. Retrieved 1
September 2018.
• ^ Parbat, Kalyan (12 June 2018). "Reliance Jio third-largest telecom
by revenue market share". The Economic Times. Retrieved 13 June
2018.
• ^ Abbas, Muntazir (16 May 2018). "Vodafone India revenue drops 29%
in FY18". The Economic Times. Retrieved 13 June 2018.
• ^ "Hutchison Max Telecom Limited information".
Corporatedir.com. Archived from the original on 24 December 2014.
Retrieved 24 December 2014.
• ^ Jump up to:a b
"THE HIGH COURT OF JUDICATURE AT BOMBAY
- WRIT PETITION NO.1325 OF 2010" (PDF). Bombay High Court.
Archived (PDF) from the original on 5 January 2012. Retrieved 19
November 2013.
• ^ "Max India Ltd". The Times Of India. Archived from the original on 27
December 2011.
• ^ "Vodafone International Holdings B.V. : Appellant(s) versus Union of
India & Anr. : Respondent(s)" (TXT). Courtnic.nic.in. Archived from the
original on 26 December 2015. Retrieved 24 December 2014.

75
• ^ "BBC News - Vodafone finalises India mobile subsidiary buyout".
BBC News. July 2011. Archived from the original on 25 September
2015. Retrieved 24 December 2014.
• ^ "/ Companies / Telecoms — Investors welcome Vodafone deal".
Ft.com. Archived from the original on 11 July 2007. Retrieved 1 May
2009.
• ^ "Piramal Group to sell Vodafone India stake for Rs. 8900 crore".
IANS, news.biharprabha.com. 10 April 2014. Archived from the original
on 12 April 2014. Retrieved 10 April 2014.
• ^ "Idea, Vodafone India Announce Merger, to Be Biggest Telecom
Operator in India". NDTV. Archived from the original on 20 March 2017.
Retrieved 20 March 2017.
• ^ Lamont, James (30 June 2011). "Vodafone warns India tax bill to hit
$5bn". FT.com. Retrieved 15 June 2013.
• ^ "Vodafone Completes Hutchison Essar
Deal". Forbes. Archived from the original on 12 February 2013.
Retrieved 11 November 2017.
• ^ "Vodafone-Hutchison deal: Vodafone wins Rs 11,000 crore tax case
- The Times of India". The Times Of India. Archived from the original
on 20 January 2012.
• ^ "Vodafone wins transfer pricing tax dispute case". The Hindu.
Archived from the original on 12 November 2017. Retrieved 12
November 2017.
• ^ Raj, Amrit (21 October 2017). "The shakeup in India's telecom
sector". www.livemint.com. Retrieved 21 April 2018.
• ^ Guha, Romit. "Idea approves merger with Vodafone India, to create
76
 India's largest telco". The Economic Times. Retrieved 20 March 2017.
• ^ Kurup, Rajesh (20 March 2017). "Idea Cellular board approves
merger with Vodafone India; shares tank 9%". The Hindu Business
Line. Retrieved 20 March 2017.
• ^ Jump up to:a b
"Disclosure under Regulation 30 of SEBI (LODR)
Regulations, 2015" (PDF). BSE. BSE. Retrieved 31 August 2018.
• ^ "What you dont now about Mpesa…". The mind of Mbugua Njihia. 15
July 2009. Archived from the original on 1 November 2012. Retrieved
24 December 2014.
• ^ "Mobile phone banking in Africa". YouTube. Archived from the
original on 11 October 2014. Retrieved 24 December 2014.
• ^ HDFC Launch Archived 16 April 2014 at the Wayback Machine.
"HDFC Launch". Retrieved 28 June 2012
• ^ ICICI Bank Archived 16 April 2014 at the Wayback Machine. "ICICI
Bank". Retrieved 28 June 2012
• ^ Russell, Jon (17 April 2013). "Vodafone launches M-Pesa mobile
banking service in India, targeting 700m 'unbanked' people". The Next
Web. Archived from the original on 21 April 2013.

77
 ANNEXURE

What is your Gender ?

• Male • Female

• Prefer not to say.

What is your age ?

• 15 -20 • 21 – 25

• 26 – 30 • Thirty & Above

What is ypur Occupation ?

• Student

• • Businessman

• Employee

• • Other

• • Mmc employee

78
What is Income level ?

• 10,000 – 50,000

• 30,000 – 90,000

• 50,000 – 1,00,000

• More than 1,00,000.

Are you aware about Vodafone Idea ?

Yes

• No

• Maybe

From which source you came know about VI ?

Advertisment

• Hording

• Newspaper

• Mouth Publicity

79
Since how long you are using VI ?

• Less than one month

• • 2 – 6 months

• • 6 – 12 months

• • More than one year

Which of the following services do you use of VI ?

• Pre – paid

• • Post – paid
How much you spending current network plan ?

• Less than 500

• 500 – 2000
• More than 2000

80
Which are the previous network you have used ?

• Airtel

• Jio

• Vodafone Idea

What are the problem your facing in your current network ?

 Very high price value

 Network issue
 Limited Tariff

How would you rate the network VI ?

• Low

• Medium

• High

Would you like to recomment other about VI (Vodafone Idea) ?

• Yes

• No

81
Overall performance of VI ?

• Good

• Very Good

• Saticsfy

82