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Saturday, February 26, 2011

Vodafone kicks off Land Line Business

Vodafone is entering India's landline market, but only for business customers



Vodafone plans to enter the leased landline and business solutions space, competing with larger private peers Bharti Airtel, Reliance Communications, and Tata Communications .
Vodafone is looking at entering the country's landline market, but only for business customers. The market for domestic landline services is much smaller and less reliable, as most consumers prefer to use mobile services.
Last year December,Vodafone Essar joined hands withWipro to manage its fixed line telecom services business. Vodafone agrees that they are a late entrant in the business but that puts them in an advantageous position of nothing to lose. Vodafone’s entry may intensify price wars in the enterprise business just like new entrants in the mobile telephony space did since late 2008.
Although landline costs have been falling by around 10-15% per year as the competition is increasing, it is still favorable compared to the cut-throat competition in the mobile market where tariffs have halved over the past two years.
With the retail customer tariffs down to one paisa per second, enterprise businesses presents high margin data revenue for telecom operators. Unlike mobile telephone call rates that have halved over the last two years, telephony solutions for enterprises have been falling 10-15 % every year.
The financial year which end in March 2016, enterprise business would account for nearly 20% of the company’s revenue. In October-December, the quarter revenue of Vodafone Essar was approximately 7,126 crore, UK-based parent Vodafone Group said and did not disclose the profitability of the region. It will also give preference to the enterprise customers on its 3G services to be launched before March-end. Vodafone Essar bought 3G airwaves in nine service areas for 11,618 crore in a government auction last year. The service is expected to bring about more profit-making data business to telecom operators.
Vodafone across the globe have been quite an upfront in innovations. In Netherlands, Vodafone is the first telecom operator to offer 'VastOpMobiel' in which entrepreneurs can receive fixed line phone calls on their mobile without the need to have a fixed line subscription and redirecting. With 'VastOpMobiel', they can be reached anywhere, anytime, and savings can be as high as 50% of the cost of a landline subscription.
In the landline business in India, Vodafone is offering free connection, free local, national calls, and free calls to Vodafone mobiles from your fixed line and a simple flat rate for calls to non-Vodafone mobiles ie 20c per minute.source

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