arun sarin pulled off what some called a seat-of-the-pants strategy, when he entered india as a suspected knee-jerk reaction to vodafone’s japanese exit. b&e does a run-on with current vodafone head of marketing, cmo harit nagpal on the whys and more...
We’re sure Arun Sarin would have read this, if he had still been in Vodafone. February 11, 2007, Vodafone Plc. announced its decision to pick up a 52% stake in Hutchison Essar Ltd. (the fourth largest telecom company in India) to get its footing in one of the fastest growing telecom markets of the world. There seemed to be an immense potential for any new player to come in and try to grab a sizeable chunk in India. But critics had put forward, and with much basis, that this India-entry was just a seat of the pants strategy for Arun Sarin, who wanted to somehow cut the flak that he had received after exiting the Japanese market. Especially when he already had an idea that he himself was on his way out from Vodafone global. And at that juncture, he didn’t want to be, in a stakeholder’s term, “Welched!” (referring to how GE’s top shareholders crucified Welch after he’d exited GE). But this is not to say that Arun was playing truant. He had his numbers well prepared while selling the idea to his board. At that time, India was adding almost 5.5 to 6.5 million customers every month; and the penetration level was well under 20%, showing massive potential in future growth. Well said, well bought. What happened thereon?
Like we mentioned, Arun would have loved to be here and now! 2009, only two years post the acquisition, Vodafone Essar Ltd. is already one step better than when they entered; they’re the third largest telecom company in India in terms of subscribers with 74 million subscribers, (as on May 2009 Source: TRAI). Though the godzillasque Bharti Airtel is not ‘overtakeable’ in the next three years (Sunil Mittal, whom we interviewed two issues ago, has 99.55 million subscribers in his company), the second in ranking figures, Reliance Communications, is more a possibility, as it has only 77.22 subscribers, a figure that can be overtaken in a year with tactical marketing. But that’s not all. Vodafone is already the second largest in terms of revenues by clocking Rs.203 billion in FY09 (growing by 35.4% in the last year) and trailing only Airtel that got in revenues to the tune of Rs.261 billion in the same period.
We’re sure Arun Sarin would have read this, if he had still been in Vodafone. February 11, 2007, Vodafone Plc. announced its decision to pick up a 52% stake in Hutchison Essar Ltd. (the fourth largest telecom company in India) to get its footing in one of the fastest growing telecom markets of the world. There seemed to be an immense potential for any new player to come in and try to grab a sizeable chunk in India. But critics had put forward, and with much basis, that this India-entry was just a seat of the pants strategy for Arun Sarin, who wanted to somehow cut the flak that he had received after exiting the Japanese market. Especially when he already had an idea that he himself was on his way out from Vodafone global. And at that juncture, he didn’t want to be, in a stakeholder’s term, “Welched!” (referring to how GE’s top shareholders crucified Welch after he’d exited GE). But this is not to say that Arun was playing truant. He had his numbers well prepared while selling the idea to his board. At that time, India was adding almost 5.5 to 6.5 million customers every month; and the penetration level was well under 20%, showing massive potential in future growth. Well said, well bought. What happened thereon?
Like we mentioned, Arun would have loved to be here and now! 2009, only two years post the acquisition, Vodafone Essar Ltd. is already one step better than when they entered; they’re the third largest telecom company in India in terms of subscribers with 74 million subscribers, (as on May 2009 Source: TRAI). Though the godzillasque Bharti Airtel is not ‘overtakeable’ in the next three years (Sunil Mittal, whom we interviewed two issues ago, has 99.55 million subscribers in his company), the second in ranking figures, Reliance Communications, is more a possibility, as it has only 77.22 subscribers, a figure that can be overtaken in a year with tactical marketing. But that’s not all. Vodafone is already the second largest in terms of revenues by clocking Rs.203 billion in FY09 (growing by 35.4% in the last year) and trailing only Airtel that got in revenues to the tune of Rs.261 billion in the same period.
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