Vodafone Idea Will Not Exit Six Telecom Circles, Telco Clarifies Stance in New Statement

Vodafone Idea has denied reports which say that the telecom operator might exit out of circles where it is facing low revenue market share

Highlights
  • Vodafone Idea has less than 15% RMS in the 6 circles in question
  • These circles include Himachal Pradesh, Bihar, Odisha, Jammu and Kashmir, North East and Assam

While Vodafone Idea held the pedestal of being the top telecom operator in the country for a short while after its merger, the position was soon taken away from it. There is also no denying that the telco has been caught in a financially troubling situation with falling revenue market share (RMS) in select circles. But, with that being said, Vodafone Idea has also firmly denied that it wouldn’t be shutting down operations in the circles which have been noted in a new report. A news report which has been floating online since Friday had noted that Vodafone Idea could be closing down its operations in six circles because of extremely low revenue market share in these areas. Vodafone Idea, in its statement, has denied saying that it would not resort to such a move.

Vodafone Idea RMS Stooping Low in Select Markets

The six circles in questions were Himachal Pradesh, Bihar, Odisha, Jammu and Kashmir, North East and Assam. It is also worth noting that this new report came from Bank of America Merril Lynch, which also noted that in these telecom circles, Vodafone Idea had less than 20% revenue market share. The six circles noted above were then listed as the likely places from where Vodafone Idea could withdraw operations. JM Financial had also come up with a similar report where it said that the telecom operator had lost revenue in the circles where it had completed the network integration exercise.

In reply to these reports of Vodafone Idea exiting these circles, the telco said, “We categorically deny and dismiss this speculation as completely baseless and factually incorrect. Vodafone Idea remains committed and will continue to serve its millions of customers in these circles.” This statement now confirms that Vodafone Idea would not be withdrawing operations from these circles.

Vodafone Idea RMS Low in Top Telecom Circles

Although Vodafone Idea is not going to stop its operations, it is still crucial to note that if the telecom operator arrives at the situation of less than 15% Revenue Market Share, then it would mean that these circles would turn EBITDA negative for the telco. Vodafone Idea has also appointed a new CEO, Ravinder Takkar, who has replaced Balesh Sharma, the former CEO of the company who resigned.

The report on the revenue share of Vodafone Idea notes that the current revenue market share in the states mentioned above stands at 5.5% in Himachal Pradesh, 9.1% in Bihar, 7.8% in Odisha, 5.6% in Jammu and Kashmir, 12.5% in North East and 15.3% in Assam. In Karnataka, the telecom operator has 16.7% revenue market share, and it is 14.6% in Bangalore city. Also, the highest dent in revenue for Vodafone Idea has happened in metro cities like Delhi and other A-list circles. But, currently, the major update is that Vodafone Idea has no intention of exiting any circles.

Arpit spends his day closely following the telecom and tech industry. A music connoisseur and a night owl, he also takes a deep interest in the Indian technology start-up scene and spends rest of his time spilling poetry and stories on paper.

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M SAniruddha Dhar|Santragachi|West BengalVishal | ChennaiTelecomnerdNikhil Recent comment authors
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M S
M S

Once Voda-Idea complete their network integration exercise, people will also be doing “Service provider selection exercise (MNP)” to select their best operator e.g. f they were in Voda network and its shut in their area in favor of IDEA, their service quality might also be impacted an will port out to other operators.

Vishal | Chennai
Vishal | Chennai

According to some news sites, VIL didn’t cashed in enough money for capital expenditure i.e network expansion.
The remaining cash balance is sufficient only for few quarters. Looks like they will be in RCom position soon in some circles atleast.

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