Vodafone Group PLC is a telecommunication British multinational company. Gerry White and Ernest Harrison founded the telecommunication company in 1984. The company has established a very large telecom network comprising approximately 150 countries across the globe. Today, we’ll discuss the PESTLE analysis of Vodafone; it focuses on external environmental factors like; political, economic, social, technological, legal, and environmental factors.
Political Factors Impacting Vodafone
Some of the main political factors in the Vodafone PESTLE analysis are as follows;
I-Government Regulations
The government regulations for the telecom companies are very strict and tough. The UK government passed the Telecommunication Act of 1984 to regularize and provide a framework for telecom companies. However, the regulatory compliance cost for Vodafone and other telecom companies is approximately 100 million British pounds.
II-Trade Policies
Vodafone operates its networking business in 20 countries and offers IT services in 150 countries across the globe. Governments and countries keep on changing their trade and tariff policies for telecom companies. For instance, the UK has recently introduced a trade tariff on all the EU operating businesses and companies; it would increase the operational cost by 300 million British pounds.
III-Political Stability
The stable political environment of the country plays a key role in the growth of businesses and companies. For instance, the telecommunication service of Vodafone experienced significant disruption in India, Egypt, and other countries due to political instability. Sometimes, the government implements jammer on the telecommunication services to deal with the political unrest. Without telecommunication services, the crowd of people won’t gather at a single point.
IV-Foreign Investment Policies
Since the telecommunication brand, Vodafone has been operating its business in various countries worldwide, and it deals with various types of foreign investment regulations. For instance, a country has a very open foreign investment policy to attract investors to boost the business sector. They change their policy over time and introduce various types of taxes, which negatively impact the company’s revenue and profitability.
Economical Factors Affecting Vodafone
Some of the main economic factors in the Vodafone PESTLE analysis are as follows;
I-Currency Exchange Rate
Vodafone is running its telecom and IT business in various countries worldwide. The currency exchange rate is highly unstable and it keeps fluctuating daily and regularly. According to an estimate, Vodafone experienced a loss of approximately 1.2 billion British pounds due to currency exchange rate differences in the foreign and international markets.
II-Market Competitive Pricing
Vodafone is operating its business in a highly competitive telecommunication industry. The company needs to offer telecom services, calls, and data packages at a highly competitive price range. Often, such type of market competitive pricing packages don’t even satisfy the company’s profiting criteria; but their goal is to attract new customers.
III-Increasing Demand
The demand for telecom services has been increasing significantly for the past few years. According to an estimate, the global annual revenue of the telecom industry has reached approximately 1.7 trillion USD. Vodafone has a network of approximately 300 million active users and subscribers. It presents a great opportunity for the telecom brand to amplify its network and sales.
Social Factors Impacting Vodafone
Some of the main social factors in the Vodafone PESTEL analysis are as follows;
I-Consumer Preferences
The consumer market needs and preferences keep on changing depending on various factors. Recent studies have shown that approximately 53% of mobile users said that they want unlimited data service. That’s why it is necessary for telecom companies to offer telecom services to the end consumers.
II-Urbanization
According to an estimate, approximately 75% of the European population lives in big cities and it will increase to 80% by the end of 2030. When more people are living in big cities, they demand fast internet connectivity and unlimited data service to run and perform various functions and operations online.
III-Tech Acceptance Rate
According to a survey conducted by the PEW Research Center, 78% of the participants believed in the fact that technology and digital devices have made their lives simpler and easier. Approximately 72% of the customers are highly cautious about their data privacy and security.
Technological Factors Affecting Vodafone
Some of the main technological factors in the Vodafone PESTEL analysis are as follows;
I-Advanced Technology
Vodafone implements advanced sophisticated technology like AI, ML, data analytics, and automation technology. It allows them to smoothly perform their operations and provide a better user experience to the customers in terms of top-quality mobile network service.
II-5G Network
Vodafone is providing 5G network service to approximately 100 cities across Europe. The telecom brand plans to reach 90% of the global customers by the end of 2025. The company has invested a significant amount of capital resources (1 billion British pounds) in the development of 5G technology and offered it to the customers.
III-Cybersecurity Issues
The consumer market has become highly cautious about their data security and data privacy. Vodafone has invested approximately 200 million British pounds in its cybersecurity system to make it secure and avoid any type of data breaches and cyber-attacks. Investment in the cybersecurity system would help the company to earn the trust and confidence of customers.
Legal Factors Impacting Vodafone
Some of the main legal factors in the Vodafone PESTEL analysis are as follows;
Regulatory Compliance
Vodafone should comply with the regulatory requirements of different countries. It comprises IPR, patents, antitrust and competition laws, cybersecurity, data security and data privacy, licensing requirements, and other legal requirements. Regulatory compliance would help the telecommunication brand to smoothly perform its various operations without any disruption or issues.
Environmental Factors Affecting Vodafone
Some of the main environmental factors in the Vodafone PESTEL analysis are as follows;
Sustainability Initiative
Vodafone consumes approximately 9.46 terawatts hours of energy, out of which, 50% of the energy is renewable; the brand plans to reach 100% renewable energy in the upcoming years. The telecom brand has taken various eco-friendly initiatives like renewable energy, recycling electric waste, managing the impact of network infrastructure, and adopting green technology. The sustainability initiatives show the company’s strong commitment to nature.
Conclusion: Vodafone PESTLE Analysis |PESTEL Analysis of Vodafone |External Environmental Analysis of Vodafone | Strategic Analysis of Vodafone
After an in-depth study of the pestle analysis of Vodafone; we have realized that Vodafone is the world’s leading telecommunication brand. If you are learning about the Vodafone PESTLE analysis; then you should keep in mind the abovementioned external environmental factors like; political, economic, social, technological, legal, and environmental.
Ahsan Ali Shaw is an accomplished Business Writer, Analyst, and Public Speaker. Other than that, he’s a fun loving person.
