SERVING 31 NATIONS

341 MILLION SUBSCRIBERS

Revenue in 2011- 45.88 billion GBP

Second Largest Subscriber base in the

World

Vodafone : Out of Many, One

9 April 2023

About the Case

Vodafone Group Plc. • Leading mobile phone operator

• Operating in 26 different countries worldwide

• Market cap of US$ 165.7 Billion

• Formed as Racal Telecom Limited in 1984

• First ever mobile phone call in UK in 1985

• Named Vodafone Group Plc in 1991 after demerger with Racal Electronics.

• World’s 1st roaming agreement

• First in UK to offer prepaid packages

9 April 2023

Growth Strategy of Vodafone

• Acquisition strategy – takeovers and subsequent integration.

• “Hunt or Be Hunted”

• Focus on revenue growth and margin improvement

• Acquired other businesses along with mobile phone business

• Partner Network Agreements

• Avoided acquiring state owned telecom companies fearing bureaucratic inertia

9 April 2023

Branding, Identity and Pricing Strategy of Vodafone

• National brand kept alive for some time.

• Rebranding.

• Homogenous corporate brand and identity.

• Sponsorship contracts.

• Did not use “low prices” to attract customers.

9 April 2023

ONE VODAFONE

Challenge for Arun Sarin to find innovative ways to integrate “a disparate group of national operations” into one company.

Winning hearts of the employees and achieving cultural alignment - biggest challenge.

Arun Sarin - a good fit for this task as he was “an operating man rather than a dealmaker”.

Vodafone’s board – Managers with different cultural and international background.

Arun Sarin emphasized the need to benefit from the economies of scale and scope.

9 April 2023

ONE VODAFONE PROGRAM

Aim – to boost annual pretax operating profit by 2.5 billion pounds by FY 2008.

To coordinate, restructure and integrate its various systems across 26 countries.

Challenge – to balance the need of coordination and synergies while encouraging local initiatives.

Currently, there are 8 programs under the One Vodafone program.

9 April 2023

8 PROGRAMS

Networks (Design & Supply Procurement, Coordination & Consolidation initiatives)

IT (Design, Back Office, Billings, ERP/HR, Operations – data centre processes)

Service Platforms Roaming (Mapping footprints) Customer (next practice services) Handset Portfolio MNC accounts Retailing (8th largest retailer in the world)

9 April 2023

IMPLEMENTATION OF ONE VODAFONE

Change in Organizational Structure Clear communication across the company via

Internet, Intranet, training programs & a monthly employee magazine “Vodafone Life!”

Special “initiation” training programs for new employees – Vodafone Footstep

The programs included its vision & values. Global Leadership Program (GLP) for high-

potential managers to rotate them across business functions and equipping them with critical multicultural skills.

9 April 2023

NEW ORGANIZATIONAL STRUCTURE

9 April 2023

NEW GOVERNANCE STRUCTURE

2 Management Committees were formed. Both were chaired by Arun Sarin

The Executive Committee – Group’s strategy, financial structure and planning, succession planning, organizational development & group-wide policies

The Integration & Operations Committee – operational plans, budgets and forecasts, product and service development, customer segmentation, managing delivery of multi-market propositions and managing shared resources

9 April 2023

2 CENTRAL FUNCTIONS

Group Marketing – to drive revenue growth. Providing customers with a differentiation of services by understanding the customer needs and focusing on customer delight.

Group Technology – to drive cost and scale benefitsLeading the implementation of a standardized architecture for business processes, information technology and network systems.

9 April 2023

WOES IN UNITED STATES AND FRANCE

• Verizon in United States and SFR in France were two ventures where Vodafone struggled to implement one Vodafone approach

• Vodafone customers could not use there cell phones on Verizon network

• Verizon planned to adapt the incompatible standards

• Vodafone failed in trying to bid for AT&T wireless

• In France they were unable to purchase SFR

9 April 2023

CHALLENGES AHEAD

• Vodafone is largest player in the industry but by being active in 26 countries out of 200, there is a lot of room to grow.

• Vodafone is yet to make a mark in Latin America and in many African countries.

• Maintaining a strategic partnership with China Mobile with a minuscule 3.27% stake in the company.

• Threats from technology like Nokia’s WiFi enabled phone which does not need a traditional mobile network, the one which Vodafone provides.

9 April 2023

ECONOMICS OF MOBILE PHONE MARKET

• High fixed costs

• Significant investments running in billions of euros to set up a nationwide network

• Once the capacity is installed the cost of additional customer using network is virtually zero.

• Once initial capital investments has been made, less than 10% of revenue is needed to maintain the network.

• An installed and running network provides a foundation for reaching very high operating margins

9 April 2023

20

INDIAN TELECOM MARKET

• Indian Telecom network with 621 million connections (as on March 2010) is the 3rd largest in the world.

• Sector is growing at a speed of 45% during the recent years.

• Growth possible due to various proactive & positive decisions of the Government and contribution of both by the public and the private sectors.

• The vast rural market holds a huge potential to drive the future growth of the telecom companies.

• Government's initiatives for increasing the telecom connectivity in rural areas are also likely to aid the telecom service providers to extend their services in the unconnected rural areas.

9 April 2023

Vodafone in India

• Formerly Hutchison Essar.

• Acquired controlling interest in Feb 2007 and became Vodafone Essar.

• Essar buy out in July 2011.

• 2nd largest operator in terms on revenue.

• 14,59,16,175 subscribers as on Oct 2011.

• ARPU of INR 122.07 (Apr – June ‘11)

9 April 2023

Major Competitors and Market Share in India

Airtel20%

Vodafone17%

Rcom17%

Idea11%

Others35%

Market Share

9 April 2023

SWOT Analysis for Indian Market

Strengths

• Enormous customer base in the wireless segment

• Large Market Potential

• Adoption of new technology (3G)

• Superior skills in acquiring companies

• Best of breed business integration and operational capabilities.

Weaknesses• Weak Infrastructure - huge initial

fixed cost for service providers

• Limited spectrum availability

Opportunities Threats

• Emerging Technologies: 4G,WiMax

• Rural telephony - World’s largest untapped mobile market

• Tier-2, tier-3 cities can accommodate more players

• Reducing tariff rates decrease in profit margin

• Increase in competition as players are increasing

9 April 2023

Recommendations by the Group

• Vodafone will outsource its IT Application Development and Maintenance activities – lead to savings of approximately 25-30% within 3 to 5 years against current annual costs of £560 million.

• Investment in R&D for Human and environment friendly technology

• Utilize acquisition skill to acquire smaller players to capture more market share

• Passive infrastructure and network sharing to cut down on operating cost

• Venture in to value added service like “Video Conferencing” and low cost mobile handsets

9 April 2023

Thank you