Vodafone Ramps up Network, Distribution in India

India's second-biggest mobile operator is expanding into rural parts of the country.

Gagandeep Kaur, Contributing Editor

April 24, 2015

4 Min Read
Vodafone Ramps up Network, Distribution in India

Vodafone India is hoping its expansion of network and retail facilities will help it to fend off its mobile rivals. The operator has recently published data revealing how much it spent in several circles on infrastructure improvements. So far, these investments appear to be paying off. Vodafone's market share rose from 18.1% in February 2014 to 18.9% in February this year, according to data from the Telecom Regulatory Authority of India.

Unsurprisingly, the biggest of the investments Vodafone India has revealed came in the mega city of Mumbai, where Vodafone spent around $158.9 million in 2014. Besides adding 1,200 new 2G and 3G sites to its Mumbai network, the operator also opened seven new stores and a further 27 "mini" stores.


Investment (in $M)

Number of sites added

Number of retail outlets added




7 Vodafone stores and 27 mini stores

Bihar and Jharkhand



3 Vodafone stores and 19 mini stores



9 Vodafone stores and 50 mini stores

Andhra Pradesh and Telengana



12 Vodafone stores and 100 mini stores

Uttar Pradesh (East)


800 (3G sites only)

11 global design stores

The Mumbai moves are clearly aimed at strengthening Vodafone's business before rivals begin offering 4G services in metropolitan areas. The risk is that 4G competitors will try to poach Vodafone's higher-spending customers. Vodafone's market share in Mumbai rose from 24.2% at in February 2014 to 27.6% last February, according to TRAI's data, although it is likely to have benefited from Loop Telecom Pvt. Ltd. 's closure of its Mumbai operation earlier this year.

Vodafone's disclosures indicate that it is also keen to improve coverage in rural parts of India. Indeed, all of the other circles (service areas) on which it has shared investment information are primarily rural in nature. Operators have traditionally been reluctant to expand in these areas because of concern about a low return on their investments, but they have started to realize the next phase of subscriber growth will happen in these communities. Competitors including Idea Cellular Ltd. and Uninor are also now making investments in India's hinterland.

Vodafone's data reveals that it built another 1,300 sites in the Andhra Pradesh and Telengana circle last year. It also increased its retail presence in the region by opening 12 Vodafone stores and 100 of its mini stores. Those moves helped the operator to grow its market share from 9.3% in February 2014 to 9.7% last February, according to TRAI. Vodafone also recorded a significant gain in Uttar Pradesh (East), where it spent $75.9 million in 2014, growing its market share from 19% in February 2014 to 21% in February 2015.

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Vodafone also claims to be the only service provider to be setting up a physical presence in towns of just 500 or so people. Its "Laal Dukaan" (loosely translated as Red Shop) facilities are designed not only to sell products but also to educate new subscribers about mobile phone services.

Vodafone's rural spending plans form part of Vodafone Group plc (NYSE: VOD)'s Project Spring investment program. Last year it added a total of 11,000 2G and 15,000 3G sites throughout India to improve the service it offers to its customers. It also now claims to have 9,800 outlets across the country.

Even so, retail expansion has recently been a focus for all of India's operators. Bharti Airtel Ltd. (Mumbai: BHARTIARTL), the biggest player, has more than 150 company-owned and company-operated outlets and plans to open additional facilities. It also has 1.4 million distribution outlets in the country. Idea Cellular, which is hot on the heels of Vodafone as India's third-biggest mobile player, operates 1.5 million retail outlets. Vodafone will need to stay on its toes.

— Gagandeep Kaur, contributing editor, special to Light Reading

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About the Author(s)

Gagandeep Kaur

Contributing Editor

With more than a decade of experience, Gagandeep Kaur Sodhi has worked for the most prominent Indian communications industry publications including Dataquest, Business Standard, The Times of India, and Voice&Data, as well as for Light Reading. Delhi-based Kaur, who has knowledge of and covers a broad range of telecom industry developments, regularly interacts with the senior management of companies in India's telecom sector and has been directly responsible for delegate and speaker acquisition for prominent events such as Mobile Broadband Summit, 4G World India, and Next Generation Packet Transport Network.

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