Service quality issues plague Vodafone Idea Limited

Kolkata: Subscribers of Vodafone Idea (VIL) in several big markets are facing service quality issues as the telco negotiates stiff challenges around network integration, which is key to the Rs 14,000-crore synergy benefits that the newly-merged entity seeks to derive by FY21.

The market leader, with just over 421 million subscribers, though asserts it’s strictly adhering to quality of service (QoS) norms nationally and has even set up war rooms to track network performance and minimise customer inconvenience.

In a written response to ET’s queries, a spokesman of Vodafone Idea-—born last August out of the merger of erstwhile Vodafone India and Idea Cellular— told ET that the contention of network integration challenges leading to poor service quality, including rising call drops, “appears presumptuous and perceptual”. The company’s drop call rate (DCR), he said, has “improved by15% at a national level, and its call set up success rate (CSSR) by 0.5%” over the past six months.


Industry executives, however, see service disruptions, including call drops, for Vodafone Idea in at least 15 markets where key vendors Ericsson and Nokia are required to shift vast numbers of base stations after the telco recently made big circlewise changes in the overall network gear supplier mix.

Ericsson, for instance, has to remove base stations from Delhi, Mumbai, Kolkata, UP-West and Punjab circles—where it’s no longer a supplier to VIL—and shift them to other markets, said a top industry executive, directly involved in the process.

He added that likewise, Nokia has to relocate gear from the Chennai metro, Maharashtra, Kerala, Punjab, MP, Bihar, Orissa, Assam, Northeast, Himachal Pradesh and J&K to other circles where it has bagged contracts from VIL.

China’s Huawei, which earlier met only 33% of VIL’s network gear requirements in Delhi, Kerala, Punjab and Orissa, and 50% in Chennai, now has to handle 100% gear supplies in all these markets.

All this, after VIL recently finalised new network gear contracts, making major circle-wise changes in supplier mix that saw Chinese vendors Huawei and ZTE emerging as major gainers over European rivals Ericsson and Nokia.

“Given that Nokia and Ericsson were jointly the dominant network vendors to the erstwhile Vodafone India and Idea, the merged entity could have easily leveraged this readymade synergy to minimise network disruption and any adverse impact on customer experience during integration,” said Rohan Dhamija, partner & head of India & Middle East at Analysys Mason.

Vodafone Idea has already lost over 20.5 million customers between September and November 2018, due also to the minimum recharge plan that the telco has introduced with the aim of increasing average revenue per user (ARPU).

The subscriber losses, Dhamija said, “lends credence to drawing a potential correlation between recent juggling in network vendor contracts and heavy customer churn,” and such a churn could continue in the coming months.

The telco, however, said shifting and movement of network equipment is a routine activity to introduce new technologies and vendors for network upgrade, adding that the company had taken extra precautions to ensure customers are not inconvenienced. VIL said the strategy driving post-merger integration of Vodafone and Idea’s overlapping networks is making them better.