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Is Vodafone on the Verge of Extinction?

One of the major telecom operators in India, Vodafone is suffering a huge crisis.

India's telecom industry has made massive strides in the last few years with the roll-out of nationwide 4G and increasing subscriber base.

~ With 100s of millions of users India is a hotspot for companies.

~ The Industry barely has 3 players left, JIO, Airtel & Vodafone. Jio can afford discounted rated because of its cash-rich parents' Reliance. But the same isn't true for others.

~ Jio is now India's largest telecom operator with more than 330M users. It acquired all of these customers within a short span of three years.

~The current average rate for 1GB data is $.26, while it costs $12.27 in the US, $6.66 in the UK and a global average of $8.53/

~Last year, Vodafone-Idea's share was listed at Rs 23.41, today it's Rs. 5.55. Investors lost 50% of their investment 5 months ago.

~How can a company run successfully & efficiently when the operating cost is sky high & profits are nonexistent.

Vodafone-Idea has a long list of problems to solve!

In order to compete with JIO, Vodafone India merged with Idea cellular to form India's largest operator with more than 400 million subscribers last year.

This didn't go according to the plan, as many users left Vodafone-idea and the company saw a combined loss of 115M users.

The merger failed to solve both the company's existing issues & total debt now stands at more than Rs. 1 Lakh Crore.

~ Vodafone's APRU (Average Revenue Per User) is now lowest in the world at Rs. 108, while JIO and Airtel are at 124 and 12 respectively.

On the other hand, Airtel has shifted its focus and wants to improve its APRU instead of adding subscribers.

According to OpenSignal, Airtel leads the charts with an average download speed of 8.7 Mbps, followed by JIO at 6.3 Mbps. Vodafone & idea (as separate entities) were at 5.9 and 5.4 Mbps.

Vodafone-India cannot even improve or invest in improving its service offering now because of huge debt and the absence of working capital.

The company hinted that it'll be conservative with the expense since their shares have been on a free-fall for months.

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