Vodafone Idea at Risk of Losing Six Circles to Low Revenue

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Vodafone Idea Might Exit Six Telecom Circles After Witnessing Steep Decline in Revenue Market Share

According to a new report, the former telecom market leader, Vodafone Idea, might find its survival difficult in six telecom circles following the steep decline of its revenue market share. As per a report form Bank of America Merrill Lynch, the telecom operators’ revenue market share has fallen below 15% in six circles including Himachal Pradesh, Bihar, Odisha, Jammu and Kashmir, North East and Assam. This might mean troubles for continuing operations in these circles and possible loss of jobs for the employees. Some loss of revenue market share can also be credited to Vodafone Idea’s attempt at removing low paying customer by focusing on increasing ARPU.

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Vodafone Idea Looks Forward to Troubling Times Ahead

The new update was reported by PTI, and it noted that for Vodafone Idea to continue operations in these circles would not make much sense because these circles would be EBITDA negative for the already financially troubled telecom operator. It is worth noting that Vodafone Idea has already remarked about its intentions of continuing to work in profitable circles. Also, amongst all three private telecom operators, Vodafone Idea is facing the worst financial crunch despite going through with the merger. It is also crucial to note that currently there is no official word from Vodafone Idea about the closure of operations in these circles. However, Goldman Sachs had revealed that the financial troubles that Vodafone Idea is facing might force the telco to exit from some circles. Also, the company has recently appointed Ravinder Takkar as the new CEO after Balesh Sharma left the spot.

Vodafone Idea Loses Revenue Majorly in Metro Cities and A Circles

As per the reports based on gross revenue, the telecom operators’ revenue market share has come down to 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 during the quarter ending June this year. In Karnataka and Rajasthan too, the telecom operator did not see impressive revenue market share as it only had a 16.7% share in Karnataka, and 14.6% in Bangalore.

JM Financials noted that in most of the circles and cities where Vodafone Idea has completed its network integration, it has steeply lost market share. Vishal Vora remains the chief technology officer of Vodafone Idea, responsible for the integration and Balesh Sharma, who was the CEO of the company, has already resigned. The highest dent in the revenue for Vodafone Idea has occurred in the metro and A circles which include the likes of Delhi, Maharashtra, Tamil Nadu, Andhra Pradesh and Mumbai.

Because of this fallout, Vodafone Idea has already lost its top position in Kolkata and Delhi. In Mumbai, however, the telecom operator maintains its lead by a large margin. In Kerala, the telecom operator might see a drop in revenue market share from its previous number of more than 50%. As per JM Financial, while Bharti Airtel will have sub 30% RMS, Vodafone Idea is likely to have around 25%. The Mukesh Ambani led telecom operator, Reliance Jio will have around 41-42% revenue market share during FY21.

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