Business Model - Vodafone

Business Model - Vodafone's gain, Airtel's loss


Vodafone India has been quite on a rise for sometime. Ever since hutch rebranded to Vodafone, it has shifted a lot. Infact, currently, in terms of growth, Vodafone is the most growing network(in terms of number of customers, not in the percentage aspect). And this has been quite some story.

Hutchison Essar was taken over by Vodafone in 2007 when Huchison decided to sell its share in the venture to the UK based Vodafone. And when the management changed, the whole policy framing changed. Vodafone started to play aggressively, unlike Essar and Hutch, which had been playing defensively, trying to hold on to its customer base from migrating to Airtel. Bharti Airtel, ion those days, was a strong player in the market. Infact,the current day Vodafone is nothing when compared to what Airtel used to be.

The new Vodafone management has changed things in quite some ways. It decided to get seamless connectivity for its consumer base, and get billings straight(earlier, hutch had a bad reputation for improper billing, my personal experience). Vodafone decided to play by its strengths, and somehow manage to hide its weaknesses. They're playing on their strengths but weaknesses are something that cannot be hidden for a long time. Poor resolution is their issue. For the last three and a half years, i've been on vodafone, and the resolution hasn't been consistent. Although they've somehgow managed to keep quality people in their manforce, but still the technicalities hasn't let them work to their full strength. For example, whenever a customer goes to the Vodafone store, he has to wait for long. Reason : The staff is busy clearing up records, and taking down official notes after the customer has left.

Vodafone seems to have learnt from Bharti Airtel on how to work efficienty. Airtel had been a hit with companies, as their corporate connections were dead cheap. So is Vodafone nowadays. My cousin, whose bought a Vodafone corporate postpaid connection is getting local call rates @ 10p/min. Thats dead cheap. Anywhere else in this cut throat competition, no operator will offer anything below 30p/min. Well, thatslooking at the fact that Vodafone has prioritised corporate postpaid connections, and understands well that only a postpaid connection can assure them of fixed returns per month,which can help them to get their working capital there. And when there are corporates involved, it means bulk connections and timely payments. A double benefit for the company. There's no reason for not promoting so. Plus, Airtel on the other hand, hasn't expanded its postpaid drive after its initial success. It changed its focus from Indian telecom to DTH,IPTV and African telecom. Once Airtel used to come up with really innovative services like Hellto Tunes(Caller Ring Back Tones),Sms 2.0(more customiseable sms services), and recently web pc(a supercheap pc which works from clouds as it has no local storage drives). Also, decreasing quality of service, and bad complaint redressal has made it worse. One of my uncles had to actually mail to the Airtel management for getting his landline disconnected as he was trying for months to get the connection terminated since the last six months, and the Airtel guys weren't disconnecting, infact billing him more and more. And look at the Airtel customer care quality these days, its pathetic. Ill trained guys. Maybe Airtel should stop outsourcing.

Coming back to Vodafone,its recently launched 3G internet services are being aggressively promoted. Infact, just to get people using mobile internet, they have recently started a whole new campaign called Super weeks, where the give some internet based service for free for a week(for example, all social networking sites were free to browse between 16 and 22nd April). Such promotional schemes to promote value added services,which are already being promoted at attractive tariff plans is a good idea. It like supporting a service support process. Interesting concept at first sight.

What do you think? Do you agree with me, or think differently. Feel free to pour in your comments