Vodafone Group Plc and the Aditya Birla group are quite shocked and alarmed by the sere drop of their JV Vodafone IdeaNSE –2.62 percent’s user base. As a result, 20 million subscribers have been lost by the carrier to its peers in just two quarters to the month of March. According to analysts, the company might have lost about 15 million subscribers for the quarter which ended on June 30.
This nosedive have opened many a discussion amongst promoters for the future endeavor of the teleco. While according to the analysts, if the telecom company wants to safeguard its future, they have to get back its subscribers even if the Supreme Court allows them to pay its adjusted gross revenue (AGR) for the time period of 20 years.
It is predicted that as Vodafone Idea starts losing more of its users (about 15 million), Jio will be adding about 6 million more subscribers, while Airtel is expected to maintain or even increase its subscriber base even further.
These strong competitors (Airtel and Jio) will be swept away more of Vodafone Idea subscribers as the day passes.
During the time of the merger (August 2018), Vodafone Idea was the market leader with about 408 million users across the nation. However, with growing competitiveness from other telecom giants has swiped about 291 million subscribers. As the other two telecom companies are standing strong with Jio having about 388 million subscribers and Airtel with 284. Moreover, if we look at the telecom regulator’s data, Vodafone Idea ranks even below in numbers if compared with Airtel’s subscriber.
Moreover, making the matter worse, as per a contingent liability mechanism, Vodafone Group has been also paying some parts of the Rs. 8,000 crore which the JV partners had agreed upon, and requires to be paid at set dates. Furthermore, they are also set to input another 285 crores by September 2020.
The telco had covered 92 percent of Indian districts, but due to this situation, the telco has been terminating numerous employees pan India and has transformed its 22 circles into 10 big clusters.