Vodafone Idea

Profile of the company

Vodafone Idea Limited is India's largest telecommunications manager based in Mumbai,
Maharashtra. However, it is an India-based GSM manager that offers 2G, 3G, and 4G
(LTE) portable administrations under two brand names, Vodafone and Idea. Support
options include mobile tariffs, IoT, advanced enterprise contributions, and
entertainment, which are accessible through computerized channels and ground contact
to inspire every Indian to build a better future across the country. It has 745 million
backers, making it India's largest versatile broadcast communications network and the
world's second-largest versatile media communications network. With Vodafone Idea,
there is a broadband network of 340,000 locations and a 1.7 million retail store reach.
Vodafone is a leading British multinational company headquartered in Newbury,
Berkshire. Its predominant markets are Asia, Europe, and Africa. Ernest Harrison and
Gerry When established it in 1991. It will be present in approximately 22 countries by
2020. Vodafone derives its name from the sentence “voice data fone,” which the
company chose to represent the availability of voice and data services via mobile
phone.
Vodafone India merged with Idea Cellular on August 31, 2018, and was called
Vodafone Idea Limited. Kumar Mangalam Birla leads the unified organization as
Chairman and Balesh Sharma as CEO.

History
On March 20, 2017, Idea and Vodafone India announced that their separate balance
sheets had supported a merger of the two companies. In July 2018, the Department of
Telecommunications approved the consolidation. The National Company Law Tribunal
awarded the final nod to the Vodafone-Idea merger on August 30, 2018. The merger
was completed on August 31, 2018, and the newly combined entity is known as
Vodafone Idea Ltd. The consolidation made India the largest telecommunications
organization by sponsors and revenue. According to the terms of the agreement,
Vodafone Group owns 45.2% of the shares of the consolidated entity, Aditya Birla
Group owns 26%, and the rest of the agreements are for people in general. He thought
he had recently bought Spice Communications Ltd, which operates as Spice Telecom,
for more than Rs 2,700 crore.
Market share of Vodafone
In 2021, Vodafone Idea’s market share will be 24.58 percent. While Airtel’s market
share increased to 29.62 percent, Jio remains India’s largest telecom company with a
35.30 percent market share.
Various economic forces, such as high infrastructure costs, price wars in most market
forces, an immersed mobile telephony market, and government regulations, impact the
industry’s companies. Government regulations, such as the recent Vodafone and Hutch
transaction, were sanctioned by the Indian government for evading taxes.

Products Offered by Vodafone

Vodafone offers various products such as postpaid, prepaid, value-added services,
Vodafone branded phones, smartphones, Voice and messaging services, Handsets,
and Internet services.
Vodafone provides multiple products, including voice, messaging, data, and fixed-line
services. The goal is to help customers with their communication needs. Text
messaging and voice services remain the primary uses and functions of handsets. To
meet the diverse needs of its customers, the company offers a variety of tariffs tailored
to different customer segments.
Customers are looking for the best product quality as data usage and the need for
sophisticated handsets have become a necessity, and Vodafone continues to provide it.
Today’s customers spend hours and hours on social media platforms and that is where
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As a result, Vodafone-branded devices and services are tailored to a diverse range of
customer preferences and needs. So, now let’s find the pricing strategy of Vodafone.
Vodafone Pricing Strategy
Now we will see the pricing strategy of Vodafone. Vodafone has maintained loyalty by
providing high-quality services and a range of services. Vodafone prices its products
based on the services that the customers opt for. The prices of Vodafone products are
targeted at various segments thereby catering to the segment depending upon the
satisfaction they would receive from the service at that price.
To compete, Vodafone prices its products in line with the competition. Now we will see
the target audience of Vodafone.

Target Audience Of Vodafone

Vodafone segments its offerings in mobile network services, enterprise services, and
broadband services using a combination of segmentation strategies. It makes use of
segmentation based on geography, demographics, and psychographics.
Vodafone’s various offerings are aimed at different segments of society. As a result, it
employs a selective and differentiated targeting strategy.
This concludes the core of the business model of Vodafone. Let’s now explore the
competitors of Vodafone in the upcoming section.

Vodafone Idea SWOT Matrix / Weighted SWOT Analysis

Opportunities Threats

Strength Opportunities (SO) Strength Threats (ST) Strategies

Strengths Strategies Investing into R&D to thwart
Leveraging brand Services industry disruptors.
recognition in new
segments

Weakness Opportunities Weaknesses Threats (WT)

Weaknesses (WO) Strategies Strategies
Investing into customer- Get out of the business and focus
oriented services and supply on growth areas
chain

Strengths of Vodafone Idea

Strengths are the firm's capabilities and resources that it can use to design, develop,
and sustain competitive advantage in the marketplace

- Strong brand recognition - Vodafone Idea products have strong brand recognition in
the Communications Services industry. This has enabled the company to charge a
premium compared to its competitors in the Communications Services industry.

- Success of new product mix - Vodafone Idea provides exhaustive product mix options
to its customers. It helps the company cater to various customer segments in the
Communications Services industry.
- Talent management at Vodafone Idea and skill development of the employees -
Human resources are integral to the success of Vodafone Idea in the Communications
Services industry.

- First mover advantage in the increasingly crowded marketplace. The new products
rapidly increase Vodafone Idea's market share in the Communications Services
industry.

- Brands catering to different customer segments within the Communications Services

segment - Vodafone Idea extensive product offerings have helped the company to
penetrate different customer segments in the Communications Services segment. It
has also helped the organization diversify its revenue streams.

- Track record of innovation - Even though most players in the Services strive to
innovate, Vodafone Idea has a successful record at consumer-driven innovation.

Weaknesses of Vodafone Idea

Weaknesses of Vodafone Idea can either be the absence of strengths or resources of
capabilities that are required, but at present, the organization doesn't have them.
Leaders must be certain if the weakness is present because of a lack of strategic
planning or strategic choice.

- Extra cost of building new supply chain and logistics network - Internet and Artificial
Intelligence have significantly altered the business model in the Services industry. Given
the decreasing significance of the dealer network, Vodafone Idea has to build a new
robust supply chain network. That can be extremely expensive.

- Loyalty among suppliers is low - Given the history of Vodafone Idea coming up with
innovations to drive down prices in the supply chain.

- Gross Margins and Operating Margins, which could be improved going forward, may
pressure the Vodafone Idea financial statement.

- Declining market share of Vodafone Idea with increasing revenues - the

Communications Services industry is growing faster than the company. In such a
scenario, Vodafone Idea has to carefully analyze the various trends within the Services
sector and figure out what it needs to do to drive future growth.

- Niche markets and local monopolies that companies such as Vodafone Idea can
exploit are fast disappearings. The customer network that Vodafone Idea has promoted
is proving less and less effective.

- High cost of replacing existing experts within the Vodafone Idea. Few employees are
responsible for Vodafone Idea's knowledge base, and replacing them will be extremely
difficult in the present conditions.
Opportunities for Vodafone Idea
Opportunities are potential areas where the firm can identify potential for - growth,
profits, and market share.

- Accelerated technological innovations and advances improve industrial productivity,

allowing suppliers to manufacture various products and services. This can help
Vodafone Idea to venture into adjacent products significantly.

- Increasing government regulations make it difficult for unorganized players to operate

in the Communications Services industry. This can provide Vodafone Idea with an
opportunity to increase its customer base.

- Lowering the cost of new product launches through third-party retail partners and
dedicated social networks. Vodafone Idea can use the emerging trend to start small
before scaling up after the initial success of a new product.

- Opportunities in Online Space - Increasing adoption of online services by customers

will also enable Vodafone Idea to provide new offerings to customers in the
Communications Services industry.

- Increasing customer base in lower segments - Customers must migrate from

unorganized operators in the Services industry to licensed players. It will provide
Vodafone Idea an opportunity to penetrate the entry-level market with a no-frill offering.

- Rapid Expansion of Economy As the US economy is improving faster than any other
developed economy, it will provide Vodafone Idea an opportunity to expand into the US
market. Vodafone Idea already has the know-how to operate in the competitive US
market.

Threats to Vodafone Idea

Threats are factors that can be potential dangers to the firm's business models because
of changes in macroeconomic factors and changing consumer perceptions. Threats
can be managed but not controlled.

- Shortage of skilled human resources - Given the high turnover of employees and
increasing dependence on innovative solutions, the company name can face skilled
human resources challenges in the near future.

- Changing demographics - The baby boomers are retiring and the new generation is
finding it hard to replace their purchasing power. This can lead to higher profits in the
short run for Vodafone Idea but reduce margins over the long run as young people are
less brand loyal and more open to experimentation.

- Distrust of institutions and the increasing threat of legal actions for Vodafone Idea -
The WTO regulations and laws are difficult to enforce in various markets. Legal
procedures have become expensive and long-drawn processes. It can lead to less
investment into emerging markets by Vodafone Idea, thus resulting in slower growth.

- Competitive pressures - The new product launch cycles are reducing in the Services
industry. It has put additional competitive pressures on players such as Vodafone Idea.
Given the large customer base, Vodafone Idea can only respond slowly to the needs of
the niche markets that disruptors are focusing on.

- Growing technological expertise of local players in the export market - One of the most
significant threats of tie-up with the local players in the export market for Vodafone Idea
is the threat of losing IPR. The intellectual property rights framework could be stronger
in emerging markets, especially in China.

- Commoditization of the product segment - The biggest challenge for Vodafone Idea
and other players in the industry is the increasing commoditization of the products in
the Services industry.

Here is a summary of the financial information of VODAFONE

IDEA LIMITED for the financial year ending 31 March 2022.
● Revenue/turnover of VODAFONE IDEA LIMITED is Over INR 500 cr
● Net worth of the company has decreased by -518.91 %
● EBITDA of the company has increased by 12.39 %
● Total assets of the company has decreased by -11.25 %
● Liabilities of the company has decreased by -30.73 %

Operating Revenue Over INR 500 cr

EBITDA 12.39 %

Networth -518.91 %

Debt/Equity Ratio -4.18

Return on Equity N/A

Total Assets -11.25 %

 Fixed Assets -10.08 %

Current Assets -13.31 %

Current Liabilities -30.73 %

Trade Receivables -16.39 %

Trade Payables 9.45 %

Current Ratio 0.29

Current Valuations for VODAFONE IDEA

The trailing twelve-month earnings per share (EPS) of the company stands at
Rs -15.5, an improvement from the EPS of Rs -25.8 recorded last year.
The price-to-earnings (P/E) ratio, at the current Rs 9.3, stands at -0.7
times its trailing twelve months' earnings.
The price-to-book value (P/BV) ratio at current prices stands at -0.8
times, while the price-to-sales ratio stands at 0.6 times.

The company's price-to-cash flow (P/CF) ratio stood at -1.2 times its end-of-year
operating cash flow earnings.