Vodafone Idea sure of meeting network integration target

Vodafone Idea (VIL) has faced challenges in its network integration process, including logistical and on removal of duplicate sites, but said it is on track to meet its network integration target of June 2020, with 14 circles already done.

"This is one area where people don't realise that you can plan a lot of technology things but there are logistical aspects when you encounter all of the issues that you face in India-road, regulations, managing subcontractors-so this has been one of the biggest challenges we have had," VIL's chief technology officer Vishant Vora told ET. "Getting this logistics programme to run from end to end is really a mammoth challenge," he said.

The telco, created by the merger of Vodafone India and Idea Cellular in August 2018, has lost some 100 million subscribers in that time and 14 million just in the April-June quarter, with many blaming service quality amid the ongoing integration between the networks of the two merging telcos.


Subscriber churn is the highest among the top three telcos at 3.7%, which though was 4.1% a year back and 7.2% in the January-March quarter. However, Vora said the integration programme in no way implies that VIL is willing to compromise on the quality and experience by its customers.

"Quality remains paramount to us and is the gating criteria for success of any integration," Vora said. He though added that "it takes a bit of time to de-duplicate the network and therefore the release of the capacity is now happening along with our integration."

VIL, which replaced its CEO recently, has completed consolidation in 78% of the districts, 62% of the spectrum and 70% of the sites.

An executive from a VIL gear vendor, on the condition of anonymity, said that decommissioning of redundant sites takes time and the telco may not meet their internal network integration deadline of 2019-end. Another executive aware of VIL's integration process said the telco is taking down sites which are not meeting its revenue threshold in a particular area, leading to capacity constraints on other sites, resulting bad or average experience for its customers. Vora though rejected the views. "We have added 1.8x capacity and traffic is 1.4. So, we have added more capacity than the traffic. When the full integration happens, capacity will be 2.5x," said Vora.

Vora added that there may be specific areas where other issues may be hurting network performance, such as environmental challenges, acts of vandalism and even diesel pilferage, which hinder all operators. "But when I look across my network, things have improved across indices," he added.

Ashwinder Sethi, principal, consulting at Analysys Mason though said that integration of two large networks will lead to short term turbulence. "Customer displeasure comes from the fact that VIL has not converted sites as many sites into 4G compared to its rival, effecting experience. However, once the integration is completed things will return normality."

As per regulator's data of June end, Vodafone Idea had put in 175,881 eNode – B, or 4G base transceiver stations (BTS), far lesser than 326,744 by Bharti Airtel and 746,147 by Reliance Jio. Vora said that the company's 1800 MHZ spectrum holding is the largest among the private players and is sufficient to handle all the data traffic. But not all were convinced.

"VIL has theoretically the largest quantity of 4G spectrum but starting a VoLTE network from scratch and converting a running 2G, 3G into 4G VoLTE is a challenge. Entire exercise requires to get down to nuts and bolts and tower by tower," Rajiv Sharma, co-head of research at SBICap Securities said.

Vora said that there may be specific areas where other issues which may be impacting network performance, such as environmental challenges, acts of vandalism and even diesel pilferage that hinder all operators.

"All of this impacts some level of network quality being compromised. Now there is a war effort to manage our way through that. Now there may be issues from specific geographies or locations, at a given point of time but when I look across my network, things have improved across indices," he added.

The telco has raised concerns over hugh debt in the sector, pressure on cash flows and the timelines for spectrum auctions in multiple forums. In fact, Vodafone Group chairman Gerard Kleisterlee and CEO Nick Read are expected to meet the prime minister and telecom minister on September 30.