Can Vodafone- Idea new venture VI sustain in Indian market?

Recently Vodafone and idea two giant spectrum company in india decided to merge their companies to sustain in heavy contestant market races. Though they have 266 million subscribers on them but they still are on tightrope. But on the other hands they have huge dues of 58000 crores in market for which they initially thought to leave the market. There subscribers base was also going down for the poor networks and call dropping.

New Start:

But they start again with the Idea ltd. They even bought 15000 crores from other countries to keep going in the market. They even sponsor in IPL showing they are still in market but their subscribers are loosing.

Premise:

In Indian market there are huge fees to even compete in the spectrum distribution of 2g,3g or 4g. For these they have to spent a lot but for the competition they can`t higher their price of subscription. When Jio invested a lot to give free data to the people it was the final warning that they can go in further dangerous path in future and exactly this happens. Many other companies such Docomo, Unionor and other companies stopped. Big giant like Airtel and Vodafone also feel the pressure and the pressure keeps coming from the companies to pay a heavy tax as penalty and interest.

Govt interfere to stop duopoly:

Indian govt realize if the burden continues all the companies will shut down and only two company remain in market which is not healthier for market. So it was announced that Vodafone can pay all the money in next 30 years. Bharti Airtel was also sinking in the market due to its heavy loans.

How VI can Survive:

Though they have huge numbers of customers but they are mainly for 2G which is not much beneficial for them. If they turned their 165 million 2G customers to 4G customers they can gain a huge capital by these. As VI such a huge number of customers but per head income of this company is far law from Airtel.

Other major factor how much they hike the price for their subscription. If they can rise 10 rs per customer they can gain 3000 crore rupees more annually from them. But if they hike price customers may tend to go to rival Jio where subscription will be lower comparatively.

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Final Thoughts:

They need to invest 2 billion dollars annually in their infrastructure to make their network work like as airtel and Jio. At present they are spending less than this which is reducing the network quality of Vodafone. Call drop rates and internet speed also hampering for these. This problems cannot be omitted by only rebranding.

They are also trying hard to make in such conditions where big tech giants like Amazon or Verizon showed their interest to buy their company. If such thing happen there will be no pressure of capital and they can focus more on building their infrastructure to give greater service to their customers.

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Can Vodafone- Idea new venture VI sustain in Indian market?

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