What Lies Ahead for VI, the New Vodafone Idea?

VI can give a tough competition to both Jio and Airtel with its 5G but 5G still has a long way to go in India

By September 12th, 2020 AT 5:01 PM

Just a few days back, Vodafone Idea Limited (VIL) announced that they are rebranding the company as VI. The AGR case verdict has cleared things for the telecom industry as well as Vodafone Idea. This rebranding move is to get a fresh start for the company. As for the AGR verdict, VI now has to pay dues worth Rs 54,754 crore in the coming 10 years. VI has had a long journey and most of us don’t know about the different phases the company has passed through. Let’s take a look at the timeline or journey of the company from the individual perspective of both Vodafone and Idea and they came together.

Vodafone & Idea and Their Past

For those of you who don’t know, Vodafone didn’t start as Vodafone. Initially, the telecom company was a joint venture between India’s Max Group and Hutchison Max Telecom Ltd (HMTL). The company came to life in 1992 and was known as Max Touch. After a few years in 2000, the telecom company was rebranded as Orange.

After another few years, in 2005-06, Max group which held 41% of the company sold its entire stake to Hutchison. Following the exit of the Max group, the Essar Group came to the scene and entered the company as a strategic partner. Hutchison Essar also merged with another telecom company in the market, BPL in 2004. After this, the company was again rebranded from ‘Orange’ to ‘Hutch’ in 2005.

Hutch was able to generate a higher Average Revenue Per User (ARPU) than its competitors in the market. The company targeted high-end postpaid customers and business users which helped the telco in earning higher ARPU. It was not until 2007 that the company was rebranded to Vodafone India. Vodafone, which used to be the leading telecom operator of the UK, entered the Indian market and purchased the entire 67% stake of ‘Hutch’ from Hutchison in February 2007. Fast forward to 2011, Vodafone group went on to purchase the entire company from Li Ka Shing Holdings and Essar Group.

Idea Cellular started out as Birla Communications Limited in 1995 after the company got the GSM license in Maharashtra and Gujarat circles. In 1996, American telecom AT&T joined the company as a strategic partner. The company later partnered with Tata Communications so that it could expand rapidly into different geographical areas of India. After which, the telco came to be known as Birla AT&T and Tata Communications Ltd (BATATA).

It was only later in 2002 that the name of the company was changed to Idea Cellular. Fast forward to 2004, AT&T came out of the partnership followed by Tata Group in 2006. So until the merger with Vodafone India, the telco was run by Birla Group alone.

New Brand Vi: Focus on Higher ARPU and Retaining Customers

Talking about the future, last week, both the companies finally became a single entity know as ‘Vi.’ The new branding was introduced to the world right after the Annual General Meet of the company took place. The company is looking to raise around Rs 15,000 crore in debt and equity and another Rs 10,000 crore via sale of its data centre and fibre business, but assured that the overall fundraising will not exceed Rs 25,000 crore.

Vi can give a tough competition to both Jio and Airtel with its 5G services. But 5G still has a long way to go in India. For now, Vi needs to focus on enhancing its cash flow. The telco cannot afford to borrow more and the Q2 results will be very important for every investor in the company. The Q2 results will show how the company has restructured its finances. VI needs to get back the customers it has been losing and needs a higher ARPU to survive. Overall, the telco has become too big to fail now and if it does, the economy of the country will take a huge hit.

Vi Callertunes: Can It Make a Difference?

Vodafone Idea has introduced an updated caller tune app called ‘Vi Callertunes.’ The new application has been launched for both Android and iOS users though it is not going to be making any difference for end-users we can see what sort of innovation they can be added up and make the use of its app with better user experience for end-users.

Vi New Data Plans and Prepaid Tariffs: What is the Future for Customers?

The tariff is for sure going to increase in coming days but as per source what we can expect in coming days is Vi can come up with some innovative customer-friendly new prepaid and data plans for customers they might also offer some new VI prepaid student plans to attract young users but all these are just speculation. Time will tell what is in store for end-users as of now there is no change in any plans right now there is a full swing of rebranding exercise is going on.

Vi to Sponsor Dream11 IPL 2020

Vi from Vodafone Idea Limited has become the co-presenting sponsor of the upcoming Dream11 IPL 2020, scheduled to commence from September 19, 2020. Vi has acquired the co-sponsorship rights of the live broadcast of T-20 premier league which will be held in Abu Dhabi, UAE and telecast on the Star Sports network. The sponsorship announcement comes close on the heels of the leading telecom operator, Vodafone Idea Limited’s rebranding under a unified brand – Vi. The young, dynamic and vibrant brand will leverage its association with the most popular sporting event IPL, in its 2020 edition, to enhance awareness, build relevance and engage with the audience.

Tanay is someone with whom you can chill and talk about technology and life. A fitness enthusiast and cricketer, he loves to read and write.

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