Vodafone-Idea's Money App M-Pesa Shutting Down, Writes-off ₹210 Cr for Payment Bank Closure

Vodafone Idea Ltd has decided to close m-pesa vertical following the closure of Aditya Birla Idea Payments Bank Ltd (ABIPBL), in which it was being merged with, a top official said on Monday. Launhed in 2007, M-Pesa is a mobile phone-based money transfer, financing and microfinancing service launched by Vodafone for Safaricom and Vodacom.

Last week, ABIPBL had announced that it is winding up of its business on account of "unanticipated developments" that made its economic model "unviable".

"The merger of Vodafone m-pesa with ABIPBL has thus been called off and business prepaid instruments and business correspondence are in the process of closure," Vodafone Idea Chief Executive Officer Balesh Sharma said company's earning call. He attributed regulatory changes for the payments bank business and deterioration in health of telecom sector to the decision.

"Now, that we are proposing not to have the payments bank as well as the m-pesa business. Instead of having m-pesa of our own, we will explore the market and partner with fintech companies," Sharma said.

Vodafone Idea wrote off Rs 210 crore in the June quarter on account of decision to close its payments bank business.

"The impairment charges include impairment in payments bank and m-pesa entities of Rs 2.1 billion (Rs 210 crore) following the decision to discontinue payments bank, wallet and business correspondent businesses in the respective entities," Vodafone Idea Chief Financial Officer Akshaya Moondra said.

The company had written off a total amount of Rs 580 crore during the first quarter of 2019-20. Vodafone m-pesa was one of the 11 firms that was given payments bank licence by the Reserve Bank of India in 2015.

Tech Mahindra, Cholamandalam Investment and Finance Company and a consortium of Dilip Shanghvi, IDFC Bank Ltd and Telenor Financial Services surrendered their payments banks licences even before commencing their business.

Sharma said that decision to close down payments bank business is also part of the company's strategy to focus on core business which is the telecom business. Vodafone Idea is phasing out 3G services and re-farming all spectrum for 4G services.

The company is looking to check the churn of customers onto other network which led it to lose market leadership position to Reliance Jio in June.

Reliance Jio had a user base of 331.3 million by June 2019 while that of Vodafone Idea subscriber base declined to 320 million in the same month. Sharma said after a minimum charge of Rs 35 per month introduced by the company, many customer consolidated to single SIM which showed 4G subscribers moving out of the Vodafone Idea network.

He said the churn has come down to 3.7 per cent and the company is making effort to curb it further with high revenue generating customers.

Few days back, a report from economists at SBI said that, "The future is "uncertain" for payments banks and the model aimed at deepening financial inclusion requires regulatory support in order to be effective."

Denying Inter-connectivity to RJio Costed Rs 3,050 Cr to Airtel, Vodafone Idea

The telecom regulator is not in a position to modify its previously recommended penalty on Vodafone India and Idea Cellular (now merged) and Bharti Airtel as it is bound by the provisions of Trai Act, according to a senior Trai official.

Citing the clauses in the Act, the regulator recently informed the Department of Telecom (DoT) that it is "constrained from offering any further comments" on the matter and the Centre now has to take a final call on the issue.

The regulator has already given its views once in response to a back reference in 2017 by DoT, the Trai official said adding that as per the provisions in the Act there is no scope for any further modification.

The Act makes it clear that once a recommendation is referred back to Trai by DoT, the regulator has to within 15 days, forward to the central government its suggestions after considering the reference made by the government.

After receipt of further recommendation, if any, the Centre shall take a final decision, the Act says.

The official, who did not wish to be named, said pursuant to the October 2016 suggestions of Trai on the penalty to be imposed on the three operators, the recommendations were referred back by DoT on April 5, 2017 for reconsideration, to which Trai sent its views to the government on May 24, 2017.

Hence, after receiving "further recommendation" in response to the first back reference, the Centre has to take final decision on the matter, the official said explaining that Trai is unable to change the penalty it had suggested since it is bound by the provisions of the Act.

In October 2016, Trai had recommended imposing a total penalty of Rs 3,050 crore on Airtel, Vodafone Idea for allegedly denying interconnectivity to newcomer Reliance Jio.

The penalty on Airtel and Vodafone works out to be about Rs 1,050 crore each. In case of Idea it comes to about Rs 950 crore. Since Vodafone and Idea have now merged their businesses, the new entity Vodafone Idea will have to bear the burden of both companies.

The Digital Communications Commission, the apex decision-making body of DoT, last month, approved imposing penalty on Airtel and Vodafone Idea for not providing points of interconnection to Reliance Jio.

Before imposing the penalty, however, the Commission decided to seek Trai's views on revising Rs 3,050 crore suggested penalty, citing the "present financial health of the sector". PTI MBI ABM ANU

Vodafone Launches Startup Kit To Promote IoT Solutions Among Startups

Vodafone India has introduced the Ready Start-up Kit that has solutions aimed to give complete visibility, manageability, and control over various business assets to startup owners. The kit aims at grabbing IoT business from startups across the country.

Vodafone India will offer complimentary access to Vodafone's IoT Managed Connectivity Platform, expert support and rental free package for 6 months for 50 IoT SIMs to develop and deploy their solution.

Vodafone India will also offer complimentary access to three curated cloud-based business apps for one month -- Vodafone CRM, Vodafone Mobile Workforce Essentials and G-Suite. These solutions can help start-ups to boost their productivity, efficiency and enhance their ability to engage with their employees and customers.

Vodafone claims that it is the only Indian telecom operator with a completely online Cloud applications marketplace - Vodafone CloudStore.

Start-ups selecting the Vodafone IoT solution will be able to increase awareness of their products and services and engage with their customers using Vodafone’s Programmatic Marketing solutions, which includes up to 50,000 SMS free package for marketing.

“The Ready Start-up Kit brings forth Vodafone’s global experience as an enabler of start-ups and reinforces our commitment to this community. We expect it to be a game changer with a suite of solutions that will empower start-ups to catalyze innovation and fast track growth,” said Sunil Sood, MD and CEO of Vodafone India.

THe above development was first reported in ET Telecom.

IBM and Vodafone India Launch New IBM Hybrid Cloud Platform to Enhance Customer Experience

IBM and Vodafone India today announced a multi-million dollar five year agreement for IBM to manage IT services support for Vodafone India’s IT infrastructure and applications environment.

By bringing together Vodafone India’s enterprise data and cloud ready applications into a scalable environment that keeps data local, private and secure, the new IBM hybrid cloud platform will enable delivery of faster and more insightful data intelligence and support faster decision-making.

IBM will support Vodafone India’s IT environment transition into IBM hybrid cloud, allowing the company to leverage and integrate existing IT resources and data assets with private cloud environments. It will support Vodafone India’s speed to market and improve the efficiency of its network and IT operations.

This agreement builds on the existing eight year relationship between the two organizations.

Vishant Vora, Director, Technology & Network, Vodafone India, said, “We are a technology driven organization and introducing the latest advances is key to delivering the best of experiences to our customers. Partnering with IBM will help us enhance customer experience with intuitive capabilities and build a cost optimized, flexible and scalable IT infrastructure.”

Vanitha Narayanan, Managing Director, IBM India, said, “We are delighted to continue our relationship with Vodafone India. IBM’s leading edge capabilities will help strengthen Vodafone India’s vision of delivering differentiated client experiences. I am grateful for Vodafone India’s continued trust in IBM and look forward to an enduring partnership with them.”

Mogae Media Raises $15M to Acquire Digital Startups And Vodafone India To Raise Rs 18,000 Cr Via IPO

Sandeep Goyal, Chairman of Mogae Media, has raised around $15 million to fund the acquisition of digital startups while Vodafone India is planning to file its draft initial public offering (IPO) documents by September.

Mogae Media Raises $15M Fund to Acquire Digital Startups

Sandeep Goyal, Chairman of mobile and marketing service provider, Mogae Media, has raised around $15 million to fund the acquisition of digital startups. The new fund will be used to make late stage investments in the Digital Media and Mobile Innovation verticals as well in service sector startups, especially in the F&B, logistics, eCommerce, mCommerce and Cab pick-up space (local mobility) with mobile enabled platforms.

“Analytics, mobile ad serving platforms, programmatic buying on the mobile, mobile fulfillment and mobile targeting are areas that Mogae Media is keenly focussed on. Any acquisition or investment in this space intrigues the interest of the company immediately,” said Sandeep Goyal.

Mogae Media was launched in 2012 by Sandeep Goyal and his wife Tanya Goyal, the company had tied up with brands like Kellogg’s India, Urban Clap, Star TV, Hero, TATA Motors, Yes Bank, Axis Bank, Kansai Nerolac, Discovery Channel, DSP Black Rock and Max Life Insurance, etc.

Vodafone India to Raise Upto Rs 18,000 crore Via IPO

Vodafone India Ltd, the Indian unit of Vodafone Group Plc., is planning to file its draft initial public offering (IPO) documents by September and will likely seek to raise Rs.15,000-18,000 crore.

“The kick-off meeting with the Tier-I banks Kotak, Bank of America and UBS happened a few weeks ago and work has started full swing on the documentation part. The company is looking to file the draft red herring prospectus (DRHP) by the month of September,” said two people familiar with the development.

The share sale will largely be a primary capital fund-raising exercise which will go towards reducing the debt on its balance sheet, on account of spectrum purchase, as well as towards capital expenditure.

In October 2015, Vodafone India announced that it would spend Rs.13,000 crore for capacity augmentation and new business initiatives. Since starting operations in India in 2007, Vodafone has invested over Rs.1.1 trillion in India. The telco has 194 million customers in India and reported revenue of Rs.42,352 crore in 2014-15, an increase of 12.6% from the previous year.

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