Vodafone Idea’s Cost-Cutting Strategy: Removing 25,000 Retail Partners in India

 Vodafone Idea, the third-largest telecom operator in India, is facing a severe financial crisis due to its huge debt and stiff competition from rivals. The company has been struggling to retain its subscribers and market share, and has been looking for ways to reduce its operational costs.

One of the measures that Vodafone Idea has taken is to remove about 25,000 retail partners from its network, according to a report by ET. These retail partners are mainly multi-brand operators who offer services for all telecom firms. Vodafone Idea has also stopped paying commissions to these partners, which could save the company about Rs 100 crore per month.

The move is expected to have a negative impact on the company’s reach and customer service, especially in rural areas where multi-brand retailers are more prevalent. However, Vodafone Idea has claimed that it has enough exclusive retailers and online channels to serve its customers.

Vodafone Idea has a network of 4-5 lakh retail touchpoints across the country, of which about 5-7% have been removed. The company also has a few thousand exclusive retailers who sell only Vodafone Idea products and services.

The company has been trying to raise funds from various sources, including selling its stake in Indus Towers, monetizing its fiber and data center assets, and seeking relief from the government on spectrum dues and license fees. However, none of these options have materialized so far.

In the quarter ended on March 31, 2023, Vodafone Idea’s consolidated loss narrowed to Rs 6,418.9 crore from Rs 6,563.1 crore in the same period a year ago. The company’s revenue increased by about 3% to Rs 10,531.9 crore during Q4FY23 from Rs 10,239.5 crore in March 2022 quarter. However, Vodafone Idea reported a widening of loss to Rs 29,297.6 crore for the year ended March 31, 2023 from Rs 28,234.1 crore in the fiscal year 2021-22.

Vodafone Idea’s future depends on its ability to raise funds, improve its network quality and customer experience, and compete with rivals like Reliance Jio and Bharti Airtel. The company has recently launched a new brand identity and a new tariff plan to attract customers. However, whether these initiatives will be enough to revive the company remains to be seen.