Vodafone in Trouble


Vodafone in Trouble
Case Code: BSTR213
Case Length: 20 Pages
Period: 2000-2006
Pub Date: 2006
Teaching Note: Available
Price: Rs.400
Organization: Vodafone
Industry: Consumer Electronics
Countries: UK, US and Japan
Themes: Globalization Strategies, Problems
Vodafone in Trouble
Abstract Case Intro 1 Case Intro 2 Excerpts

Early History

When the British government opened a bid for cellular licenses in 1982, Gerald Whent (Whent), then chairman of the Racal Radio Group, a subsidiary of the Racal Electronics Group (REG), convinced REG's board to bid for a cellular license. After a successful bid, Whent established the Racal Telecomms Division (RTD) in 1983 in Newbury, UK, with a view to developing and implementing an analog network in the UK.

Since the license did not permit the company to sell its network directly to the public, When set up a wholly-owned subsidiary called Vodac as the service provider of the analog network in 1984. RTD launched the first ever analog network in the UK on January 1, 1985, with a call being made from St Katherine's Dock in London to Newbury. The analog network was given the name 'Vodafone', which stood for 'voice and data services over mobile phones'. By 1988, RTD accounted for one third of REG's total profits. Also in 1988, RTD floated 20 percent of its ordinary share capital on the LSE and the New York Stock Exchange (NYSE). In 1989, the company formed Paknet, a 50-50 joint venture with Cable & Wireless...

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