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Vodafone Idea upticks minimum recharge value


Posted on : 22/Nov/2018 18:31:28

As a move to compete with its industry rivals Bharti Airtel and Reliance Jio, here is Vodafone Idea Ltd that is in its expansion spree with the new 4G mobile tower sites. Vodafone is stepping into 4 different categories in the segments in terms of leadership and profitability. It has different strategy for each of the two, says reliable source from Vodafone Idea Ltd.

The network has also got plans to increase the minimum recharge tariff rate, as it is eyeing on increasing its profitability. In the two years 2020 and 2021, Vodafone is aiming at winning its target of ₹14,000 crore. It also aims at saving on its operational expenditure by Rs 8400 crore and capital expenditure by R s 5600 crore, say sources.

In a meeting involving Vodafone Idea management and telecom analysts, discussions about telecom providers growth strategy and its near future plans were discussed.

Both of the brands including Vodafone and Idea are to be operated. A tariff hike is likely. This is going to be very significant as price repairing is likely due to the negative free cash situation.

Expansion goals

Vodafone is eyeing on expanding its 4G coverage to about 50-70 percent of the country in another 6 months. And by 2019-20, furthermore expansion of up to 80 percent is likely. This initiative will make Vodafone competent with the other network providers who are at present surpassing the former in terms of 4G coverage in the country.

Over a billion Indians are to be covered with 4G network. A plan for the same is currentlyg being executed with which the services shall be made available to either of the brands.

With the launch of Reliance Jio back in September 2016, there was heavy competition created in the telecom sector. Following this, the merging of Vodafone and India happened. Announcement regarding this was done in March 2017 and it became a reality in 31st August.

After merging of these two companies, there was a reported loss of Rs 4970 crore. The Vodafone Idea had seen a dip in Arpu till Rs 88 for the quarter. There was customer migration observed after low Arpu. The Arpu level of Airtel remained high at Rs 101 and that of Jio was Rs 131.7 pertaining to the same quarter.

To increase profitability, Vodafone Idea shall cut down the production cost and show more focus towards profitable areas and promote Arpu simplification.

Coming on to Bharti Airtel, back in October recently, it had announced about simplification of 7-8 tariff plans where the minimum pack of recharge was set as Rs 35. It aimed at decreasing the total  number of marginal customers.

Vodafone Idea says that the merging is currently being done along with spectrum consolidation and integration of the two networks.

The potential capital rise of about Rs 25,000 crore is being evaluated by Vodafone Idea. The potential sales with Vodafone is also being studied. This comprises of over 1,56,000 km including intra and inter city fibre coverage, says a company statement.