NEW DELHI: Vodafone Idea Ltd, which is in the midst of a complex integration process, said its chief executive Balesh Sharma has resigned citing “personal reasons” and will be replaced by Vodafone Group’s India representative, Ravinder Takkar.
Sharma’s exit comes less than a year after the merged entity started operations on 31 August 2018. The merged company has since lost market share and posted losses in every quarter of the past year, amid a bruising tariff war.
Sharma, who was driving the integration process at the company, will take up a new role at Vodafone Group Plc, Vodafone Idea said in a statement on Monday.
Takkar is a board member of Vodafone Idea and Indus Towers. He is responsible for all Vodafone Group interests in India. Prior to this, he was the CEO of Vodafone Romania for three years and CEO of Vodafone Partner Markets in London. He has been with Vodafone Group since 1994.
Takkar was earlier tipped to be the first chief executive of the company and was leading negotiations on Vodafone Group’s behalf during the merger.
Given that the company’s market value has reduced to a fraction of what it was a year ago, Takkar’s biggest test will be to resurrect investor faith in the company.
The company’s share price plunged to ₹5.99 on Monday from ₹30 on 31 August 2018, when it started trading.
“Investors are worried that Vodafone Idea might become a penny stock. Takkar’s entry seems to be the company’s last bet in a gloomy scenario. If this fails, the company’s existence is in question,” a Mumbai-based analyst said on condition of anonymity.
As of date, Vodafone Idea has completed the network integration process in 11 out of 22 circles and hopes to achieve the rest by June 2020.
Takkar faces the arduous task of ensuring that the integration process is completed smoothly and the company pares its losses.
Several employees whom Mint spoke to said that there was friction between the employees of Vodafone and Idea after the merger.
“Idea employees were getting senior roles at circles and enjoyed a sense of continuity at the merged entity, which Vodafone employees did not, as the group de-consolidated its India operations,” an employee said on condition of anonymity.
A Vodafone Idea spokesperson denied instances of friction at the company and called it a “factually incorrect assumption”.
Vodafone India and Idea Cellular announced their merger in March 2017 in response to the entry of Reliance Jio Infocomm Ltd in September 2016.
Despite the merger, Vodafone Idea has been facing a rough ride, with shrinking revenue and a gross debt of ₹1.2 trillion as on 30 June.
Since the completion of the merger, the company has lost subscribers every month. Its active subscriber base declined from 334.1 million in the March quarter to 320 million in the June quarter.
Because of the customer churn that was triggered by the introduction of minimum monthly recharge plans in November to weed out low-paying users, Vodafone Idea’s revenue fell 4.3% to ₹11,269.9 crore in the June quarter from ₹11,775 crore in the preceding three months. The telecom operator had posted a loss of ₹4,873.9 crore in the June quarter, despite the company witnessing higher data consumption on its network and signing up more 4G subscribers.
Before that, the company posted a loss of ₹4,881.9 crore in the March quarter, ₹5,004.6 crore in the three months ended December, and ₹4,973.8 crore in the September quarter.