In an interaction with ET’s Danish Khan and Devina Sengupta, Vora said that Vodafone Idea is confident of achieving its target of June 2020 to completely merge both networks in the country.
T<\/strong>ell us about the integration progress so far?<\/b>
There are three large parallel programs we are running in our company. One is about de-duplication and releasing synergies which are delivering a lot of benefits both in terms of cost reduction as well as putting extra spectrum to use which has the capacity. Secondly, we are adding a huge new capacity layer on our network. The third thing is we are also running a massive transformation program where we are putting in many of the 5G or next-gen technologies into our 4G<\/a> plus network.
We are creating a programmable network which will have very large scale cloud deployment, edge computing. We believe this will be the largest deployment in the country. Most likely it will the largest deployment in the world of edge cloud.
Those are three programs running in parallel.
The biggest benefit of the merger was these two companies and their spectrum position. We have the largest amount of FDD spectrum in the country. The biggest benefit is the spectrum benefit.
We have over 1800 MHz of spectrum across the country which is more than anyone else. Out of that total liberalized holding is larger than the other players. We have a long life left on the spectrum, which is also very important. It shows that the long-term roadmap for us is looking better and liabilities going forward are also
Additionally, we were the first operator in the world to do dynamic spectrum refarming. We are deploying this at a larger scale across the country.
We have completed 14 circles so far. 78% of the districts in the country are now consolidated, while 62% of my spectrum has now been consolidated. 70% of my sites have been consolidated and 36% are the top 50% of cities have also been consolidated.
Originally at the time of the merger, we said that it will be a 3-year long program. We are 13 months in, and we are far ahead of our merger plan and we are well in our track to deliver by June 2020, a commitment given to our investors.
So far, we have increased capacity by 1.8 times from day zero (September 1, 2018). The coverage has also increased for Vodafone and Idea brands. There's been a 40% increase in traffic from day zero, while 4G throughput has gone up from 1.5 to 2 times across all properties.
In terms of cost savings, 76,000 sites have been de-duplicated. We have rolled out new 60,000 technology sites, including FDD, TDD sites, Massive MIMO sites, and small cell sites. 10,000 sites are the run rate for the last six months or 14 sites every hour. At the peak, we have been doing 21 sites every hour.
It is actually going well and faster than we had imagined.
We are seeing this improvement through consolidation in terms of data throughput.
Nothing of this scale has happened anywhere in the world. The closest of this would be TMobile-Sprint merger which will start in the US. They say that it will take them 3 years before they see any benefit and that's when they are less than half of our size. We are doing it in half the time for the network which is double in size and we are doing it under very trying circumstances. We have constantly struggled with law and order issues, vandalism issues, and we have to struggle with natural calamities and all unpredictability that India has as opposed to the US.
How do acknowledge the work of your employees involved in this integration that work under trying circumstances?<\/b>
<\/b>We are doing things from time to time to recognize their efforts. This is so widespread and there is a recognition program that runs in every circle. Whatever we do is probably lower what they really deserve. I don't see any other place in the world where people would be so dedicated and put in this kind of work. I have worked in multiple countries and I have not seen this kind of sacrifice.
What are other network-related challenges so far since two big networks are coming together?<\/b>
Challenges one would expect anyway in such a program. We are bringing in two different technologies and networks together. In the majority of cases, the two vendors were different. For instance, Vodafone would have had Nokia as a vendor, Idea might have had Ericsson. We are trying to bring this harmonization and taking the equipment out from one and packing it all up and sending it to another circle where we have chosen that vendor to be deployed. the logistical challenges are enormous in programs like this.
This is one area where people don't realize 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.
The teams have really stepped up and delivered well because a huge part of synergy is coming from the re-use of the equipment. There was so much duplication. What happens is these 76,000 de-duplicated sites and equipment is they have to be taken down and sent back to the warehouse and repackage and take all these equipment from multiple sites to create a brand new site.
Getting this logistics program really to run from end to end is really a mammoth challenge. That has been the biggest challenge and we have explained how that has gone.
This is the vendor harmonization. We had to make sure that our vendor partners have gotten sufficient incentive schemes to stay fully engaged. we have successfully managed that as well.
I can't comment on commercial details around this. We have awarded enough business; therefore they remain as committed and deliver to our expectations.
Are there any issues around payment terms by some of the vendors?<\/b>
If those were the challenges, we would not have been able to deliver all these things because they are an integral part of our program and they deserve as much credit as my employees for delivering this. We have not had any such issues. I can't comment beyond that because that is covered by NDAs we have with them.
Have you deployed POs for deployments?<\/b>
This program was meant to be a three-year program at the beginning of the merger and we are going to complete it in 18 months. If there were any delays, my program would not be running at this pace. Anything beyond that I can't really comment because that is covered under NDAs with our vendors. But, not a single vendor has delayed anything nor told us about any delays or told they can't complete the project. They have all stepped up. They have put in whatever the resources are required. There are no commercial issues that are getting into the way of my program and delaying it whatsoever.
Has Huawei's global challenges and band impacted VIL<\/a> integration?<\/b>
We have had the fastest integration. The circles that are with Huawei -- Delhi, Karnataka, Kerala, Punjab, Bihar, and Orissa. Within Delhi, we have integrated East NCR, Kerala is majorly done, Karnataka, Punjab, Bihar, and Orissa are fully done. All my supplies have continued to come and being deployed from Huawei.
There are worries about network congestion. Why are consumers, especially those in metros, complaining about network congestion? How are you faring in the rural area?<\/b>
Network congestion can mean different things to different people and we will have to look at specific issues that people are facing. My network statistics are getting better. There may be specific areas where other issues which may be impacting network performance. Lot of them tend to be environmental issues.
From time to time we have vandalism affecting our fibre, our sites, we also have an issue of diesel pilferage affecting many sites. When we try to take that on we get a strong push back from the people who are doing the pilfering. We have also had natural calamities and tremendous rain affecting multiple circles. 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.
But you are in the middle of the integration process so it is more important that things happen within the deadline that you have set for yourself. <\/b>
We have always worked under deadlines and nothing in this company happens without deadlines. June 30, 2020, is the deadline, and we have learned to manage the business, how we work within the deadlines to give the right customer experience and meet customer expectations, that is not a compromise we would make. I want to assure my customers that the integration program in no way implies that we are willing to compromise on the quality, experience by our customers. That is first and foremost part of the plan.
We have a robust framework that we put in where we have a central team, that looks at customer experience and runs a war room across all the circles. These war rooms run on a weekly basis in every circle and every month at a national level. In these war rooms, we look at all the areas where there is room to improve quality. This is a program we started before integration, during the integration and will continue post-integration. One should not carry the impression that we are compromising quality for the sake of integration.
Is there capacity challenge you are facing?<\/b>
India has the highest data usage for mobile operators in the world. We have shown the largest improvement in throughput speed 51% for Vodafone brand and 24% for Idea brand in the last 9 months. It is the clearest indication of congestion in the data networks, because when you have congestion in 4G network, speed suffers.
We have been improving those speeds so yes, there was an issue on 4G networks 9 months ago, which we have thoroughly addressed, everywhere we have integrated. Other data also show similar improvement and we have improved far more than our competitors. This is because we have a great spectrum position.
In addition to that, we have deployed over 10,000 massive MIMOs in India today. This is the largest deployment of massive MIMOs in India and neither of my 2 competitors has that. They are 100-200 and we are 10,000 plus. This is largest deployment outside China and in the world. We have over 10,000 small cells deployed strategically to ensure we are addressing all those congestion issues in our 4G data networks and we are delivering consistently great experience for our customers.
Analysts have said that VIL has not invested in 4G sites aggressively as compared to its rivals. Your comments.<\/b>
4G deployment started 3 years ago for everybody. Vodafone and Idea were competitors at that time so many of the sites that they had built were duplicating each other. The thesis for this merger is that by combining the companies are reducing the de-duplication, you will release a lot of synergies in terms of cost and capacity. Besides spectrum benefits, a lot of benefits comes from removing the sites which were implemented independently and redeploying it. If you look at the combined investment of Vodafone and Idea over that period of time, you would see that we have been investing substantially. 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. We have sufficient sites to serve all our business plans in terms of customers, revenue and we are confident of achieving that.
You said you have sufficient spectrum and auctions are coming up. Does this mean VIL will not participate?<\/b>
The industry is in a serious debt situation and most of the debt is towards the government on the spectrum that we have already acquired. When you look at the debt burden that we are carrying, does it make sense to increase the debt burden with another round of auctions? This is something that needs to be relooked at or there are other models like Japan, like China, which are more advanced economies that India and have a clear industrial policy related to telecom. In both these countries was given for free. There was a recognition in these 2 countries that 5G would drive the digital economy. Those countries had taken a call that it is not something we want to make a source of for our treasury of revenues. But we will enable it to make large investments and big deployment of 5G. We also need to find use cases of India, which will deliver maximum value and benefit for the country.
What about the 4G spectrum?<\/b>
We have plenty of spectrum, more than anybody else. We will participate as per our business needs. Right now, I have plenty of spectrum everywhere, I am well positioned so I am no in desperate need to go out and get spectrum. For spectrum auctions 3-4 years ago, the imperative was very different.
India did something very unique where incumbents buy business all over again. No other large economy has done that and if you wanted to stay you had to buy your license all over again. No major economy has done anything like this. You create desperate situations out of desperation. Desperate situation tries desperate behaviors which is why we have ended up here.
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