This time last year, Kyle Whitehill made his first trip to India. He was considering a potential turning point in his career: swapping his role of enterprise chief for Vodafone UK for COO at Vodafone India.
It is difficult to imagine two more opposing tasks. One involved developing sophisticated new software and application services for corporates
and small businesses in a market with 120% penetration, where he succeeded in increasing Vodafone’s market share and selling new services such as mobile email.
The other is a wild landgrab in a country of over one billion people, where six million customers sign up to a mobile phone for the first time every month, where the average customer spends less than £6 and where the biggest technology challenge is trying to bring mobile phone coverage into villages.
Twelve months in, Whitehill meets Mobile in the confines of the Hyatt hotel in Mumbai. It is a few weeks after the terrorist shootings in the city and security is high at all five star hotels in the city. Mirrors are slid under cars, bags are checked several times and everyone is given a fulsome padding down by heavily armed and heavily moustached policemen before entering the hotel.
In the space of a year, Whitehill has thrown himself into India. He has tripped up on Hindi phrases while bravely delivering speeches to hundreds of employees in Goa, dressed up as king Momo (king of the carnivals)
for a regional event in Jaipur, visited the world’s biggest slum in Mumbai,
and risked a potential diplomatic incident after he banned the famous Indian ‘shakey head’ at Vodafone’s offices in India.
He says: ‘The head thing comes from people not wanting to saying yes or no, so it’s bang down the middle. For a while I was left thinking whether that person has said yes or no, so I said “I don’t mind yes or no, but pick one!”’
Biggest global rebrand
Vodafone’s presence in India is the biggest legacy in previous group CEO Arun Sarin’s reign. The deal to buy the Hutchison Essar business was concluded in February 2007 after a lengthy tussle with large domestic corporations. The UK-based operator ended up paying $1.1bn to Li Ka Shing, the man behind 3’s parent company, Hutchison Whampoa, to take its 67% share held in the Hutchison Essar business as it was called at the time. Vodafone now owns 55% of the Indian business, with Essar holding 33% and Indian nationals holding the remaining 15%.
The company is now called Vodafone Essar but trades as Vodafone.
Essar executive Asim Ghosh is the managing director of Vodafone Essar, with Whitehill in the COO role.
Whitehill arrived after the world’s biggest ever rebranding exercise, as the company transformed its livery and name from ‘Hutch’ to ‘Vodafone’ – an epic task, as any visitor to Mumbai would testify.
Over 5,000 places were rebranded in the space of one week in September 2007, three months before Whitehill first arrived.
The ubiquity of the Vodafone name is immediately arresting as soon as you arrive in Mumbai and make your way into the city.
Dwellings and stores are painted with Vodafone’s brand, frequently at no cost to Vodafone. ‘If someone said they want to paint your flat with their company logo, you would laugh them out of town. In India, it’s different. The thought is you are actually improving the quality of their living accommodation for them. I thought “Oh God” when I first saw that. But people have said it is very prestigious for them to have a big global brand painted on their dwelling.’
100 million customers
Whitehill was approaching three and a half years at Vodafone UK, and was becoming itchy for a move, as the role in India was made available.
‘It sounded exciting. The three things I had in mind were what’s the country like, what’s the job about, and what is it going to be like to live there?’ he says.
Upon seeing the country, his mind was quickly made up. ‘It was a great job, and with 9,000 people in the business, I was involved in looking after all the operational parts. Mumbai is an interesting place, and I’ve never been
to anywhere like it. And could I live
there? Well, that’s the easiest bit. It’s hugely accepting. People are warm, open and friendly.’
Having accepted the job, Whitehill had a clear remit after he started in March 2008. ‘We were going to grow a customer base of over 100 million people. We had to think about the implications of having a business that big. It is only really China and India that are that big, and we didn’t have a template for a business on that scale.’
His other task represents arguably the biggest achievement for Vodafone India in 2008.
The Indian telecoms regulator and government department for telecoms carved the country into 23 ‘circles’ (effectively regions), with separate licences required for each circle. Vodafone was present in 16 circles when Whitehill arrived, and the company aimed to be in 23 by the end of last year – something it quickly achieved, and then had to make its presence known. ‘That took up my time for the remaining nine months,’ he adds.
Indian mobile retail
Like all Indian operators, Vodafone has standalone businesses with a specific ‘circle head’ in its various circles, and with separate solus distribution networks and separate marketing and communication teams.
Within each circle, it is further broken down into zones and branches, creating a complex distribution system to manage centrally.
India, like many emerging markets, is dominated by prepay, doesn’t have a subsidy model and requires a customer to buy a Sim card and handset separately.
It means there will be over one million agents across India selling Vodafone Sim cards soon – a potential logistical nightmare.
There are large mobile only and gadget chains across Mumbai that all have the look and feel of a Carphone Warehouse or Phones 4u store. There are also Vodafone’s own direct stores. But these are not where the vast majority of mobile-mad Indians buy their phones and Sims.
For that, there are the thousands of independent stalls and kiosks. Shops selling toothpaste, tea and cigarettes have quickly branched out into Sims. One kiosk told how in the space of one year Sim-card sales soared to represent 80% of his entire business by value.
India is now in the midst of 3G licence auctioning, raising the central issue of spectrum and coverage once again. Many observers believe 3G could be revolutionary for Indians, allowing millions of people who couldn’t communicate via post or have never used fixed-line telephony or broadband and will effectively leapfrog three stages of communication.
Whitehill says: ‘Customers in India are very demanding about network, customer service and value. That will make the difference over the next
Vodafone ready for the shift into rural India
Whitehill’s next challenge is coverage and moving Vodafone beyond the big cities.
‘The Indian market is only 10 years old. Phase one was the four major metros (Mumbai, Delhi, Bangalore and Chennai), which serve 50 million people. That’s the same size as the UK and there’s reasonable penetration there. The next logical place is the next 20 big cities, which are all bigger than one million people. That’s where the Indian telecoms industry is at the moment,’ he says.
The challenge facing Whitehill and the whole of the Indian telecoms industry now is reaching rural India.
Whitehill adds: ‘We have to find the next 300 million people who can also benefit from calling each other.’
In another staggering statistic about the Indian telecoms market, there is only 25% of the population covered, with 10,000 base stations going up every month – akin to putting up a new network in the UK every mont