Vodafone and Idea, being the second and third largest operators respectively in the Indian telecom market, can maximise the merger’s value using the synergies mentioned in the table below:
In terms of brand identities, the companies could adopt the following strategy to prevent any dilution of brand image:
· Umbrella branding: Project both companies as two different brands to end customers. Use strong advertising to help people perceive a distinct image of each brands, with different capabilities, though having the same parent.
A similar example is of the DTN and DTAC brands in Thailand, that serve as the second largest operator by user base.
Given the intense competition in India’s telecom sector, here’s how the merged entity can aim to be the country’s top telecom provider.
· With two brands available to customers as Vodafone and Idea, clearly demarcating the service levels and targeting specific customer segments will bring benefits.
· The brands can be tagged as ‘Premium’ and ‘Superior’, depending on the number of customers in different circles.
· Operations:
1. The Superior category will have a high number of users, and provide relatively lower service levels than the Premium service.
2. A new user will typically first opt for the Superior carrier. Then, if the users want better quality services, they are moved to Premium, which has more bandwidth and thus better service levels.
The combined entity should aim to garner higher market share in data, given Jio’s aggressive schemes. These are some measures it can take in this area:
Getting wider margins from Premium services, the Superior brand can focus more on attracting new, untapped users, as well as porting users subscribed with other operators, into the umbrella.
Strategy:
In the initial phase, the operator will offer Premium services at the price of Superior services to attract new users.
(The first runners-up are first year students of NITIE Mumbai.)