In 2016, when Reliance bowled over the money–spinning industry with the introduction of its trump card, Jio, thatchanged the whole landscape of the telecom industry. Subsidized by the deep pockets of its founder Mukesh Ambani, within a short span, Jio fabricated a staunch connection with its target audience and bagged the total market share from 6.4% in December 2016 to 32.14 % in December 2019.
This was an alarming nod for other prominent telecom service providers like Idea, Vodafone, and Airtel. This situation calls for an action plan thus, in 2018, Idea and Vodafone decided to collaborate in the hope that the collaboration will save their sinking ship.
BUT soon in 2019, the unrest was declared due to the Citizenship Amendment Act (CAA) which resulted in the suspension of internet services in various parts of the country. As per reports Vodafone Idea clocked in the highest loss ever in the country which stands at Rs 50,921 crore, in the month of November 2019 followed by Airtel which recorded a loss of Rs. 23,045 crore in the same month.
Ultimately, on 7 September 2020, two telecom giants merged into one unified brand and re-branded themselves as ‘ VI’ read as ‘we’. Soon after the rebranding was announced, Vodafone Idea share price surged by 4%. Mr. Ravindra Thakkar, Chief Executive officer and Managing Director said that this brand integration not just denotes the fruition of the biggest telecom merger in the world, yet it sets us on our future excursion to offer world-class digital experiences to one billion Indians on our strong 4G network.
He added that the new entity will be more slender, nimble, and more ready to fit into the future world of digitalization and 5G. It will likewise keep on putting resources into building up its foundation and fresher innovations, for example, fast and secure leased lines, MIMO, and cloud services.
Now, what about Jio and Airtel? The real competition begins asto how dangerous this newly merged entity is for Jio and Airtel, which for quite a long time had been taking out subscribers from Vodafone and Idea. In the article by dailyo.in, it is expected that Vodafone-Idea will come up with aggressive pricing plans to recover their subscribers’ base from its rivals.
Even recently, the company received a much-needed relief when the nation’s apex court conceded Vodafone Idea and BhartiAirtel, another monster telecom administrator in India, with 10 years to pay off their debt they owe to the legislature.
It will be interesting to see how VI will re-position themselvesin the market and what branding strategy; they employ to spread the word. What do you think?
https://mnacritique.mergersindia.com/news/reliance-jio-can-acquire-80-mn-4g-users-in-2-years-clsa/
Written by Rahul Mohanto
