As part of my writing on Brandology – the art and science of building brands – I decided to explore some of the thorny issues concerning certain sectors of the Indian economy. After airlines, I wrote about the telecom industry in my previous blog post and the kinds of policy reforms we must see in order for the industry to grow along with the Indian economy.
The industry is certainly in growth phase what with 5G networks being built and services being rolled out across the country, as well as broadband internet and business solutions also being provided by telecom service operators in India. However, for the size of our country both in terms of geographical spread and population, we have too few players in the industry. Of course, it wasn’t always like this and I explore why the industry grew and then shrank in a matter of two decades in my previous blog post on the industry.
In this article, I would like to focus on what Vodafone Idea – the worst performing and beleaguered telecom company – can do to get out of the slump it has been in and how it can grow and become more competitive. As an old Vodafone subscriber from 2001 onwards in Delhi (its Hutch days), later in Chennai and now in Goa, I also feel awful that the company and brand built by my former employers, Ogilvy Advertising, is in such dire straits in India.
Immediate steps
Assuming that the telecom industry undertakes a slew of reforms such as those I have recommended in my previous blog post, and that the industry is able to grow and invest for the future, I think that the first step Vodafone Idea must take is to pare down their debt. All telecom service providers are burdened by debt and Vodafone Idea is no different; it’s just that in its case so much of the debt had to be converted to equity with the government of India now the single largest shareholder with a 49% stake in the company. The government has said that it doesn’t wish to nationalize the company or continue long as the largest shareholder, and I expressed my view in one of my earlier articles on why Vodafone Idea should not go the Air India way.
The government is reported to be looking for a strategic investor in Vodafone Idea who can acquire some of the government’s stake and can pump in capital that the company badly needs. I am not sure that the strategic investor should only be one that can pump in capital for this would make it a financial investor not a strategic one. I think the largest strategic investors in Vodafone Idea ought to be Vodafone and the Aditya Birla Group themselves. And any additional large strategic investor ought to be one from the technology and telecom space, preferably an international company. As I have already said in my previous article, the cap on international telecom companies’ shareholding needs to be raised. Ideally a strategic investor for Vodafone Idea would be one who can bring in technical expertise along with financial capital, with Vodafone itself being the preferred partner.
Besides paring down debt and repairing its balance sheet, Vodafone needs to address its next biggest problem immediately: that of losing subscribers every month to rival networks. This brings us to matters of product offerings and brand-related issues. Here, I must reiterate my strong view that Vodafone Idea should never have merged the two brands Vodafone and Idea, even as the companies merged. This has been one of the biggest contributors to the problems the company faces. We shall return to the mobile brands and product offerings in a little more detail in a bit.
Diversifying its business
Meanwhile, in addition to mobile services that Vodafone provides to individual subscribers, Vodafone Idea need to invest in and build its business solutions for companies. Airtel and Reliance seem to be leagues ahead in this area, and I was surprised to even learn of Vodafone’s presence in this very important segment on the company’s website. This is an important way to diversify their operations and improve their profitability, even while the basic mobile services business is being mended, and I think that both Airtel and Reliance Jio benefit hugely from the business solutions segment.
The third business segment that Vodafone Idea needs to be present in is broadband internet, which its competitors Airtel and Reliance Jio also provide. Here too, I was surprised that Vodafone Idea does provide broadband internet through a separate company – a subsidiary, I would imagine – called You Broadband. I had never heard of this until I saw it on their website.
It appears to me, therefore, that Vodafone Idea is not giving adequate attention and not investing enough resources in the business solutions and broadband internet segments, when these segments could actually be critical to turning Vodafone Idea around. For one, they provide additional and more profitable streams of revenue and have good potential growth in the next few decades in a country like India. Second, they give the company a little more time to set right the main 4G/5G mobile services business that is suffering hugely, even though I think that it generates most of the company’s revenue today.
Mobile services brands and marketing
In the mobile services segment, Vodafone Idea is in the process of expanding its 5G network across the country and lags its peers, Airtel and Reliance. Here, we need to now address issues of brand and product offerings. If we consider the potential growth of the telecom industry in India, there is likely to be solid growth in all customer segments – those upgrading from 2G/3G to 4G and 5G customers. There is a huge market, I believe, of featurephone users in India in the 2/3G segment who need to be upgraded to smartphones and 4G usage in the next decade or so. This is precisely the market that Reliance Jio targeted when it launched, and with great success. What made it a clincher is that Reliance also produced their own handsets – feature phones for 4G – that offered basic mobile telephony as well as access to entertainment apps such as YouTube, Jio Hotstar, etc. through its own operating system called Kai OS, which I happened to read about only recently.
I always thought that this is the market that a brand such as Idea could have also addressed, in terms of helping 2G feature phone users upgrade to better mobile phone experience and eventually to 4G smartphones. It is estimated that there are around 350 million feature phone users in India even today, and this is a large market for both Idea and Reliance Jio to address and help upgrade to 4G and smartphones. Therefore, this is the real market opportunity for a brand such as Idea, now and in the future. There is also a huge need for a very basic smartphone, competitively priced with 4G feature phones, that can help millions of feature phone users upgrade to smartphones; apparently the price barrier is still too much for most to make the switch. I think it may be more than the price barrier; many feature phone users might find smartphone technology a little intimidating and therefore Idea as a brand will also have to do some concept-selling and education in its brand-building communication. If the brand strategy for Idea can be summed up in a thought it would be something like “Go ahead and grow with Idea”.
Coming to Vodafone, it ought to be the mobile brand for 4G and 5G smartphone users who are at the middle and upper end of the mobile phone market. People who use their smartphones to talk, text, connect on social media and use other apps for news as well as entertainment, browse the internet, use email, and even to do some of their work. This way Vodafone would use both its mobile brands to maximum advantage and benefit millions of mobile phone users in the country. Here, Vodafone Idea should attempt to grow its ARPU (average revenue per user) and improve its profitability, while the Idea market generates the volumes.
Within each of these brands’ markets, there is still sharper segmentation possible, and this ought to be along customer interests and mobile usage patterns. I see three broad segments for both Idea and Vodafone: Students and the youth, working adults and senior citizens/elderly folk. This kind of segmentation will help Vodafone Idea devise the right kinds of plans for each of these subscriber groups, in both prepaid as well as post-paid product offerings.
A word of caution here, about which I referred to in my previous blog post on the telecom industry. That marketing in the telecom industry was showering too many benefits on subscribers which they might not even need or use, and of course, Reliance Jio contributed to this trend in a big way. This is because the focus of all telecom companies has been to chase subscriber growth, and not subscriber retention and growth, as I wrote in my previous blog post. To some extent this is required as the mobile telecom market in India has been growing. But now the time has come to focus more strongly on customer retention and growing their usage of mobile services, as this is what would increase companies’ ARPU.
Therefore, mobile plans ought to be devised specific to various customer segments, and ought to start small in the beginning. Over time, seeing the usage pattern of the subscriber, Vodafone Idea can upgrade the plan to a higher tariff one (but at a special lower rate than what a new subscriber would pay), with a few more relevant freebies/rewards thrown in. And then, of course, there is a customer loyalty or rewards programme which Vodafone Idea can be the first to introduce in the industry in India, as no mobile service company has launched one as yet.
Branding and marketing the other businesses
As far as the other businesses are concerned such as business solutions and broadband internet, Vodafone Idea must take care to brand these services properly as well. If Vodafone Idea decides to rely more on Vodafone’s technology and technical expertise in these business segments, as might be advisable, it would make sense to brand them as Vodafone Business Solutions and Vodafone Broadband Internet. While Airtel leads in business solutions, with 57% market share, I was surprised to discover that Vodafone has around 20% share in this business segment. This is a good foundation upon which to build aggressively in the coming months and years, with Vodafone’s technology and expertise leading the way. While it is reported that BFSI, IT, manufacturing and government are the largest clients for telecom business solutions, it might make sense for Vodafone Idea to also target international businesses that are setting up GCCs (Global Capability Centres) in India as clients. These would be compact and more manageable clients and at the same time might help Vodafone Idea scale up faster.
And finally, Vodafone Idea must allocate enough resources in terms of the best marketing personnel as well as marketing budgets across all three businesses in order to grow all of them at higher rates and make the company more competitive in the industry. Enough thought must be given to the marketing and brand strategy and to the advertising and brand communications for each business segment. For example, it might be necessary to adopt TV advertising as the main communication for relaunching Idea, while for Vodafone a better mix of traditional TV, print and digital would work better. Ideally, it would make sense for the Vodafone campaign to follow the global campaign for Vodafone in terms of brand positioning and message. However, from what little I saw of Vodafone’s advertising on YouTube, it doesn’t seem like they have a very clear and distinctive brand positioning and message. Decades ago, I remember the international campaign being about “The future’s exciting! Ready?” which highlighted innovations by Vodafone that improved mobile service and connectivity between people. I think at the time, the Vodafone advertising business globally was still aligned with Ogilvy. However, now Vodafone’s website says the company has awarded its advertising business to Publicis since December 2025, and I am not sure what new communication the new agency will recommend and create because the page is titled Publicis Production! The Vodafone website itself speaks about “everyone connected” as the main message, which breaks down into “people connected”, “businesses connected” and “continents connected” to cover the different segments of their mobile telecom business. I think this is still too generic and needs to be differentiated from competitors in a way that makes Vodafone the preferred mobile telecom choice.
When advertising broadband internet for homes it should be possible to do this under Vodafone’s main relaunch campaign, especially if it shares the Vodafone branding which is what I would recommend. Vodafone business solutions would require business-to-business advertising on TV news and business channels as well as business magazines. This campaign also needs to be supplemented with sales presentation kits for the sales teams who will be calling on prospective clients. And, of course, finally all of these segments require to be followed up with regular direct communication in the form of email marketing, for strengthening customer relationships and upgrading customers to higher and better mobile plans and solutions.
There’s plenty to be done to set Vodafone Idea on the path to growth and competitiveness but it’s not impossible and ought to be initiated soon. As India’s mobile telecom market grows in the decades ahead, the country needs more mobile telecom companies to fight for a larger share of a growing pie. Vodafone Idea ought to be leading India to new frontiers, including broadband and satellite-based technology, bringing millions of customers reliable telecommunications, internet connectivity, business connectivity, media and entertainment streaming, mobile payments, and so much more.
The featured image at the start of this post is by Robin Worrall on Unsplash, to which I have added the Vodafone and Idea logos on Canva
Post script: Even though I am an old subscriber of Vodafone in India from its Hutch days in 2001 in Delhi, as I write in the article above, I have had unprofessional PR agency idiot bosses from Perfect Relations meddle with the company and its office in Goa to disrupt my mobile connection time and again, as I have shared in a couple of posts on LinkedIn.
By the way, the “Continue as Geeta?” nonsense continues to this day and I am unable to access, read, and manage my smses properly as a result!
Peripatetic Perch 