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Vi Ends Partnerships with 25,000 Retailers to Cut Costs



1/ Vi ends’ partnerships with around 25,000 retail partners, ceasing commission payments.

2/ Decision based on retailers' limited contribution to customer acquisition costs.

3/ Vi aims to save money in light of subscriber base erosion and competition from rivals.


Estimated Cost Savings: ~Rs. 70 Cr. - ~Rs. 90 Cr. per annum 💰💸


Cost Optimisation Impact:

1/ Cost Reduction: The primary impact is a reduction in operational costs. By eliminating commission payments to retail partners, Vi can achieve significant savings, allowing the company to improve its financial position and profitability.

2/ Revenue Market Share (RMS): Jio's revenue market share (RMS) stood at a strong 41.7% in the March 2023 quarter, followed by Airtel with 36.5% (no growth). Meanwhile, Vi continued to cede RMS, with the share falling to 16.6%.


Country: India 🇮🇳

Company: Vodafone Idea Limited

Industry: Telecommunications

Cost Element: Commission to dealers and others

Nature: Opex

Cost Classification: Variable Cost + Marketing Overheads

The Calculation:

Commission to dealers and others in FY 2021-22 (Rs. in Cr.): 1,396.20

Total number of retail partners ~400,000 to ~500,000

~25,000 Retail partnerships cessation

Cost Savings (1396.20 * 25k/400k) (1396.20 * 25k/500k): ~Rs. 70 Cr to Rs. 80 Cr.






 


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SANKALP WADHWA

Partner, Chandra Wadhwa & Co. (Cost Accountants) | B.Com, FCMA, ACA, DISA | Certified SAP-CO Consultant | Executive Program on Management and Finance (IIM, Ahmedabad)


Address: 1305 & 1306, Vijaya Building, 17, Barakhamba Road, New Delhi - 110001, India Mail: sankalp.wadhwa@cwcindia.in

Tel: +91-8800018190, +91-7503703599.

Website: www.cwcindia.in





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