|Predecessor(s)||Hutchison Essar Limited|
|Headquarters||Peninsula Corporate Park, Ganpatrao Kadam Marg, Lower Parel, Mumbai, Maharashtra, India|
Vodafone India Limited, formerly Vodafone Essar Limited, is the third largest mobile network operator in India after Airtel and Reliance Communication by subscriber base. It is based in Mumbai, Maharashtra. It has approximately 147.48 million customers as of December 2012.
In July 2011, Vodafone Group agreed terms for the buy-out of its partner Essar from its Indian mobile phone business. The UK firm paid $5.46 billion to its Indian counterpart to take Essar out of its 33% stake in the Indian subsidiary. It will leave Vodafone owning 74% of the Indian business, while the other 26% will be owned by Indian investors, in compliance with Indian law. On 11 February 2007, Vodafone agreed to acquire the controlling interest of 67% held by Li Ka Shing Holdings in Hutch-Essar for US$11.1 billion, pipping Reliance Communications, Hinduja Group, and Essar Group, which is the owner of the remaining 33%. The whole company was valued at USD 18.8 billion. The transaction closed on 8 May 2007. It offers both prepaid and postpaid GSM cellular phone coverage throughout India with good presence in the metros.
Vodafone India provides 2.75G services based on 900 MHz and 1800 MHz digital GSM technology. Vodafone India launched 3G services in the country in the January–March quarter of 2011 and plans to spend up to $500 million within two years on its 3G networks.
- 1 History
- 2 3G
- 3 Angel Stores
- 4 Subscriber Base
- 5 Marketing campaigns
- 6 Awards and recognition
- 7 Controversies
- 8 Timeline
- 9 See also
- 10 References
- 11 External links
Max Touch, Orange and Hutch (1992-2007)
Hutchison Max Telecom Ltd. (HMTL), a joint venture between Hutchison Whampoa and the Max Group, was established on 21 February 1992. The licence to operate in Mumbai (then Bombay) circle was awarded to Hutchison Max by the Department of Telecommunications (DoT) in November 1994. The cellular service branded "Max Touch" was launched the same year. Switching and other related equipment were provided by Ericsson and the network was designed, engineered and set up by Motorola. Hutchison Max entered into the Delhi telecom circle in December 1999, the Kolkata circle in July 2000 and the Gujarat circle in September 2000. Licences for these circles had initially been awarded by the DoT in 1994, 1997 and 1995 respectively. Between 1992 and 2006, Hutchison acquired interests in all 23 mobile telecom circles of India.
Hutchison Max rebranded Max Touch as Orange from 14 February 2000, thus introducing the Orange brand to India. India was the eighth country where Orange was launched. Shortly, issues arose concerning the ownership of the Orange brand in India, when France Telecom (now Orange S.A.) acquired the worldwide rights for the Orange brand in May 2000 from Vodafone, and planned to enforce its ownership of the brand in India to cash in on the brand's popularity. France Telecom expressed interest in purchasing a significant stake in Hutchison's India operations, but Hutchison India officials turned it down saying that they were in no mood to sell, and that they would eventually effect a merger of their operations in all circles by taking their Indian partners along. In December 1999, the two companies had entered into a licensing agreement on trademark use and to provide telecom services under the Orange brand in the territories of Mumbai, Navi Mumbai and Kalyan. Hutchison retained the rights over the Orange brand in India through this agreement, but had to pay royalty to France Telecom. France Telecom had earlier entered into a joint venture with BPL Mobile (now Loop Mobile), a competitor of Hutchinson Max in the Mumbai circle; but sold its entire 26% stake in the joint venture in December 2004. Thus, it completely exited from operations in India.
HMTL was renamed Hutchison Essar Limited (HEL) in August 2005. The name change was to reflect the consolidation of its five entities in India (Hutchison Essar Mobile Services, Hutchison Telecom East, Hutchison Essar South, Aircel Digilink India and Fascel) earlier that year. At the time, Hutchison Essar had over 8.8 million subscribers in 13 telecom circles of India - Mumbai, Delhi, Kolkata, Chennai, Gujarat, Andhra Pradesh, Karnataka, UP East, UP West, Rajasthan, Haryana, Punjab and West Bengal. The consolidation led to the introduction of a single brand name, Hutch, across the all circles in the country in which Hutchison Essar operated, ending the use of earlier brand names like Celforce in Gujarat and Command in Kolkata. However, the Orange brand continued to be used in Mumbai until January 2006, when it was replaced by the Hutch brand.
In Delhi, Uttar Pradesh (East), Rajasthan and Haryana, Essar Group was the major partner. But later Hutch took the majority stake. By the time of Hutchison Telecom's Initial Public Offering in 2004, Hutchison Whampoa had acquired interests in six mobile telecommunications operators providing service in 13 of India's 23 licence areas and following the completion of the acquisition of BPL Mobile that number increased to 16. In 2006, it announced the acquisition of a company (Essar Spacetel — A subsidiary of Essar Group) that held licence applications for the seven remaining licence areas. Initially, the company grew its business in the largest wireless markets in India — in cities like Mumbai, Delhi and Kolkata. In these densely populated urban areas it was able to establish a robust network, well-known brand and large distribution network – all vital to long-term success in India. Then it also targeted business users and high-end post-paid customers which helped Hutchison Essar to consistently generate a higher Average Revenue Per User (ARPU) than its competitors. By adopting this focused growth plan, it was able to establish leading positions in India's largest markets providing the resources to expand its footprint nationwide. In February 2007, Hutchison Telecom announced that it had entered into a binding agreement with a subsidiary of Vodafone Group Plc to sell its 67% direct and indirect equity and loan interests in Hutchison Essar Limited for a total cash consideration (before costs, expenses and interests) of approximately $11.1 billion.
Hutch was often praised for its award winning advertisements which all follow a clean, minimalist look. A recurrent theme is that its message "Hi" stands out visibly though it uses only white letters on red background. Another successful ad campaign in 2003 featured a pug named Cheeka following a boy around in unlikely places, with the tagline, "Wherever you go, our network follows." The simple yet powerful advertisement campaigns won it many admirers. Ads featuring the pug were continued by Vodafone even after rebranding. The brand subsequently introduced ZooZoos which gained even higher popularity than was created by the Pug. Vodafone's creative agency is O&M while Harit Nagpal was the Marketing Director during the various phases of its brand evolution.
Vodafone acquires Essar's Stake
In 2007, Vodafone granted options to Essar that would enable the conglomerate to sell its entire stake for $5bn, or to dispose of part of the 33 per cent shareholding at an independently appraised fair market value. In January 2011, Vodafone objected to Essar’s plans to place part of its 33% stake in India Securities, a small public company. Vodafone feared the move would give an inflated market value to Vodafone Essar. It had approached the market regulator SEBI and also filed a petition in the Madras High Court.
The final shareholding pattern post this deal was not provided by the company as it was not clear whether Vodafone's stake would exceed the 74 per cent FDI limit. Indian laws don't allow foreign companies to own more than 74% in a local mobile-phone operator. Vodafone has assured it will comply with local rules. Vodafone will have to sell that 1% to some Indian entity, or they’ll have to consider an initial public offering. Vodafone also said that final settlement is anticipated to be completed by November 2011. The completion of the deal would be subject to meeting certain conditions which include Reserve Bank of India's permission as well as valuation of the deal.
On March 31, 2011, Vodafone Group Plc announced that it would buy an additional 33% stake in its Indian joint venture for $5 billion after partner Essar Group exercised an option to sell the holding in the mobile-phone operator. The deal raised Vodafone’s stake to 75%. Essar left the company after it implemented a put option over 22% of the venture. Vodafone exercised its call option to buy an 11% stake.
Vodafone-Hutchison Tax Case
Vodafone was embroiled in a $2.5 billion tax dispute with the Indian Income Tax Department over its purchase of Hutchison Essar Telecom services in April 2007. It was being alleged by the Indian Tax authorities that the transaction involved purchase of assets of an Indian Company, and therefore the transaction, or part thereof was liable to be taxed in India.
Vodafone Group Plc. entered India in 2007 through a subsidiary based in the Netherlands, which acquired Hutchison Telecommunications International Ltd’s (HTIL) stake in Hutchison Essar Ltd (HEL)—the joint venture that held and operated telecom licences in India. This Cayman Islands transaction, along with several related agreements, gave Vodafone control over 67% of HEL and extinguished Hong Kong-based Hutchison’s rights of control in India, a deal that cost the world’s largest telco $11.2 billion at the time.
The crux of the dispute had been whether or not the Indian Income Tax Department has jurisdiction over the transaction. Vodafone had maintained from the outset that it is not liable to pay tax in India; and even if tax were somehow payable, then it should be Hutchison to bear the tax liability.
In January 2012, the Indian Supreme Court passed the judgement in favour of Vodafone, saying that the Indian Income tax department had "no jurisdiction" to levy tax on overseas transaction between companies incorporated outside India. However, Indian government thinks otherwise. It believes that if an Indian company, Hutchison India Ltd., conducts a financial transaction, government should get its tax out of it. Therefore, in 2012, India changed its Income Tax Act retrospectively and made sure that any company, in similar circumstances, is not able to avoid tax by operating out of tax-havens like Cayman Islands or Lichtenstein. In May 2012, Indian authorities confirmed that they were going to charge Vodafone about 20000 crore (US $3.3 billion) in tax and fines. The second phase of the dispute is about to start.
On 19 May 2010, the 3G spectrum auction in India ended. Vodafone paid 11617.86 million (the second highest amount in the auctions) for spectrum in 9 circles. The circles it will provide 3G in are Delhi, Gujarat, Haryana, Kolkata, Maharashtra & Goa, Mumbai, Tamil Nadu, Uttar Pradesh (East) and West Bengal.
On 16 March 2011, Vodafone launched 3G services in Uttar Pradesh (East) in the city of Lucknow. Vodafone had already launched limited 3G services in Chennai and Delhi earlier, but the Uttar Pradesh (East) launch counts as its first fully commercial launch. This makes Vodafone the fifth private operator (seventh overall) to launch its 3G services in the country following Tata Docomo, Reliance Communications, Airtel and Aircel.
On 23 June 2011 Vodafone launched 3G service in Kerala by joining with Idea in an Intra Circle Roaming agreement. Initially Vodafone 3G services will be available in the following cities in Kerala – Ernakulam, Aluva, Calicut, Koyilandy, Alappuzha, Cherthala, Malappuram and Manjeri. On 28 June 2012, Vodafone launched a new international roaming package under which the users shall have not to pay multiple rentals in the countries they are visiting.
Vodafone Angel Store, is a first of its kind retail concept store, that is completely managed and run by women employees, including security, pantry staff, customer service resources and management level personnel. As of 3 September 2013, there are 16 Vodafone Angel Stores across 14 states of India. Stores are currently operating in Agra, Ahmedabad, Bhubaneshwar, Chennai, Delhi, Goa, Haryana, Hyderabad, Jaipur, Kerala, Kolkata, Lucknow, Mumbai, Mysore, Pune, Shillong, Vadodara and Rajkot.
According to Marten Pieters, Managing Director and CEO, Vodafone India, "The Angel Stores are a part of Vodafone’s commitment to provide our women employees with one of the most secure and productive work environment. Additionally, our women customers feel more welcomed while visiting the store." Vodafone's own research and customer feedback revealed that the Angel Stores help improve the quality of customer service as women generally show greater patience and empathy than men, and are able to act and help in speedy resolution. Vodafone also found that higher productivity and performance parameters recorded in Angel Stores, across locations.
Following is the Vodafone India subscriber base statistics as on January, 2013.
|Telecom Cicle||No. of Subscribers|
|Madhya Pradesh & Chhattisgarh||4,101,877|
|Jammu & Kashmir||666,009|
Total number of Vodafone India Subscribers : 141,519,840, i.e. 21.54% of the total 657,158,013 Indian mobile phone subscribers.
Zoozoos, BlackBerry Boys, Pug (network campaign), Chota Recharge, Delights, etc
IPL Season 2 saw the birth of the Zoozoo for Vodafone: eggshell like characters created to tell a new value-added service story each time. In 2008, Vodafone had unveiled the ‘Happy to Help’ series during the first season of the Indian Premier League (IPL). With the launch of the second season, Vodafone had given birth to the Zoozoo: a special character created specifically to convey a value added service (VAS) offering in each of the newly released commercials.
There were some 25 such commercials planned under this campaign. The aim was to release approximately one ad a day, to sustain interest till the end of the IPL.
In September 2010, Vodafone India, in an endeavour to take the benefits of Blackberry services mainstream and reach out to its young and upwardly mobile audience, had successfully launched a campaign featuring the 'Blackberry Boys'.
Conceptualised by Ogilvy India, the television commercial showed five men in suits, singing about how, being business people, they are distinct and superior from the rest and make smart use of their BlackBerry phones. Their song takes a twist when casually dressed youngsters join in and sing about the cool stuff that they do with their BlackBerry phones. The jingle was widely appreciated and the advertisement did a good job in bringing down the notion that BlackBerry phones are meant only for the executive world.
The BlackBerry boys returned in 2012 with their second commercial which talked about how they are no longer the 'BlackBerry Boys' because the youth uses BBM service for various purposes, right from sharing pictures to music and many more, which takes them beyond the world of chatting. The advertisement was shot in a manner that gave the impression of a 'boy-band' music video and was backed by the song, 'They are the BlackBerry Boys'.
Network ads with the Pug
"You & I" was an advertising campaign of Vodafone India which aimed at establishing the superior network provided by the company. The ads featured a child actor Jayaram along with a pug named Cheeka. The dog follows the boy in unlikely locations, prompting the tagline, "Wherever you go, our network follows." The duo first appeared on TV, billboards, newspapers and bus shelters in 2003 and became instant celebrities all over India. The campaign was created by Mahesh V. and Rajeev Rao, Senior Creative Directors at Ogilvy & Mather, Mumbai.
Vodafone launched Vodafone Delights in October 2011 that offered customers benefits on travel, lifestyle, dining and entertainment with other commercial establishments. These benefits could be availed by the customers by sending a SMS or dialing a USSD code. The Vodafone Delights commercials depicted a budding friendship between two schoolgirls who would go out of their way to treat the other. The jingle ‘Little things you do for me’ appreciated by every viewer and struck a chord a chord especially with the youngsters.
Made for You offers
The Vodafone 'Made For You' campaign was launched in November 2012. It was a set of three commercials that were practically identical except for the situations that had been portrayed. The first television spot was set in a tailor's shop, the second at the barbershop and the third in a fitness centre. Together they created a montage of shots of people talking to the camera and providing detailed specifications about their needs in every situation.
Vodafone Internet Campaign IPL 6
After a brief break, the Zoozoos were back on Indian television with a new set of ads during the IPL 2013. Only this time, they were accompanied by a new set of characters. These characters resembled the Zoozoos in almost all aspects except their size and their distinctive helmets. Termed as the Mini Zoozoos by many, these characters did not have any official name.
Awards and recognition
1992: Hutchison Whampoa and MAX group establish Hutchison Max
2000: Acquisition of Delhi operations and entry into Calcutta (now Kolkata) and Gujarat markets through Essar acquisition
2001: Won auction for licences to operate GSM services in Karnataka, Andhra Pradesh and Chennai
2003: Acquired AirCel Digilink (ADIL — ESSAR Subsidiary) which operated in Rajastan, Uttar Pradesh East and Haryana telecom circles and rebranded it 'Hutch'.
2004: Launched in three additional telecom circles of India namely Punjab, Uttar Pradesh (West) and West Bengal.
2005: Acquired BPL Mobile operations in 3 circles. This left BPL with operations only in Mumbai, where it still operates under the brand 'Loop Mobile'.
2007: Vodafone acquires a 67% stake in Hutchison Essar for $10.7 billion. The company is renamed Vodafone Essar. 'Hutch' is rebranded to 'Vodafone'.
2008: Vodafone acquires the licences in remaining 7 circles and starts its pending operations in Madhya Pradesh circle, as well as in Orissa, Assam, North East and Bihar.
2011: Vodafone Group buys out its partner Essar from its Indian mobile phone business. It paid $5.46 billion to take Essar out of its 33% stake in the Indian subsidiary. It left Vodafone owning 74% of the Indian business.
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