India

Vodafone AGR case will impact connected cars In India

The Vodafone case in the Supreme Court related to the Adjusted Gross Revenue (AGR) dues will have some dramatic consequences for the Indian connected car market. Vodafone had indicated that the Supreme Court didn’t grant a minimum time of 15 years to pay off its debt, consequently, it would face the possibility of shutting down in India. The Supreme Court in its judgment gave it just 10 years which means that any connected car which is based on Vodafone embedded SIM in India would face the possibility of losing connectivity in case Vodafone-Idea filed for bankruptcy. 

The outlook for Vodafone-Idea is certainly not looking good. Many connected cars systems are based on its network. For instance, UVO by Kia, Suzuki Connect by Maruti Suzuki and BlueLink by Hyundai are all based on Vodafone embedded SIMs and the OEMs don’t offer the choice to the consumer to change the network. 

From a longterm view, Vodafone-Idea is set to be marginalized in the connected car space in India. Vodafone-Idea has tumbled from being the leading mobile telecom operator in India post its merger to being relegated as number three behind Reliance Jio and Airtel. This has meant its profits have also tumbled which has created a financial crisis in the wake of the AGR dues. This also has a domino effect on its ability to invest in future-facing technologies. 

Madhok points out that it will be behind in 5G. “Vodafone will also be behind in adopting future technologies like 5G,” he said. Reliance Jio is already ahead in the 5G race with its acquisition of US-based technology company Radisys. Airtel is also quickly adopting technologies from Nokia and Ericsson for 5G. 

The India-China border situation and general global discontent against Huawei also impacts Vodafone. Huawei was recently banned from providing 5G network technologies in markets like US and UK. India’s outlook towards Huawei has also grown negative thanks to the border skirmishes with China in Ladakh. 

Vodafone-Idea is the prime consumer of Huawei’s network hardware which is known to be significantly cheaper than alternatives from Samsung, Ericsson and Nokia. This further causes a financial strain on it in India. These strains trickle down to its ability to invest in connected car technologies. 

However, for the end-user, even one who has a car with a connected car stack using Vodafone’s network shouldn’t worry. “OEM partners who have connected car systems based on embedded SIMs from Vodafone will have the ability to transition their customers to alternative network providers” adds Madhok. 

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