Vodafone set to conquer Indian mkt

It came, it bought out Hutch but will it conquer the Indian market? That’s what the world's largest telecom company Vodafone wants to do but its tough to be the numero uno.

Number 3 is not his position of comfort! Vodafone Chief Arun Sarin has given the company 3 years to climb up to number one position. Sarin's strategy is focussed clearly on increasing rural subscriber base. But average revenues from these subscribers that are currently between Rs 75 to 125 rupees a month may not be enough to maintain profitability. Analysts say Vodafone will have to aggressively convert the high-end customer with revenues of over Rs 500 to maintain its margins. This may not be very easy

"Don't see a big shift in the market share. There is no reason for people to change the number and they should have a good enough reason to churn" says Prashant Singhal, Partner, E&Y.

Besides, unlike most other markets, Vodafone will have to compete with at least 4 telecom giants in India - Airtel, BSNL, Reliance and the Tatas. Most of these players are very well entrenched in the market. Airtel, Reliance and BSNL already have operations across India. Hutch-Essar, Now Vodafone is present only in 18 circles.

"Is present in all 23 circles to relocate that network and subscriber base, Vodafone will take time to catch up" adds Harit Shah, Research Analyst, Angel Broking

Airtel, Reliance, tata are all household brands in India with high recognition and brand equity. Vodafone will be a brand new name in India especially in the rural areas that is Vodafone's target market.

Analysts say that unless Vodafone can offer a very attractive proposition not only in terms of tariff plans but also in the form of better network quality, customer interface system and innovative value added services, displacing any of these big players could be a long call.