A new coat of paint for Vodafone Idea as it rebrands as Vi
Today, struggling Indian telco Vodafone Idea has announced a rebranding, being unveiled as ‘Vi’.
“It’s time for a fresh start,” said Vodafone Group CEO Nick Read. “That’s why we believe that now is the perfect time to launch Vi, one company which provides the strength of Vodafone India and Idea.”
The extent to which Vodafone Idea is in need of this “fresh start” cannot be understated. In recent years, the telco has found its subscriber base slashed by the aggressive entrance of Mukesh Ambani’s Reliance Jio into the Indian market in 2016. This year has seen Vodafone Idea’s subscriber numbers continue to haemorrhage, dropping around 20 million subscribers in the first two quarters of the year. Jio, on the other hand, continues to go from strength to strength, attracting a wealth of high profile investors, including Facebook and Google, who are injecting over $20 billion into the telco.
But losing business to Jio – and, to a lesser extent, to third-place rival Bharti Airtel – is only part of the problem for Idea.
Since the start of the year, the Indian telecoms sector has been saddled with immense adjusted gross revenue (AGR) payments by the government, with fees running into the billions of dollars. The ongoing Supreme Court battle over the fees has been frenetic in the past few months, with the situation looking especially dire for Vodafone Idea, which has repeatedly threatened to fold under the pressure.
However, this month has seen a ray of sunlight break through Idea’s overcast sky, with the Supreme Court granting them a 10-year period over which to pay their AGR dues. This month also saw Idea’s shareholders approve a plan to raise $3.4 billion through the raising of debt and sale of shares. With more cash in their pocket and a longer deadline for government payments, things may be beginning to turn around for the beleaguered telco.
The new Vi says it will continue to invest in its 4G network, which now reaches more than one billion people, as well as working alongside the government to help deliver on their digitalisation and connectivity programmes.
“With our new brand — Vi, we stand committed to partner with government to accelerate India’s progression towards a digital economy, enabling millions of citizens to connect to the digital revolution and build a better tomorrow,” said Kumar Mangalam Birla, Chairman of Aditya Birla Group and Vodafone Idea.
While things may be looking up for Vi, there is still much work to be done if the company is to remain competitive and, ultimately, survive. The company has yet to turn a profit since its creation from the merger of Vodafone Idea and Idea Cellular back in 2018.
A rebranding as Vi may be a great opportunity to figuratively turn over a new leaf, but the changes will need to be larger than a simple name change if the telco is to reverse its fortunes.
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