Vodafone is at the heart of the mobile future - where telecommunications, infotainment and information technology meet. It is a highly customer-driven organization and believes that happy, fun people who enjoy coming to work equate to a great experience for its customers.
Vodafone employs around 1400 staff in New Zealand and keeps its management structure as flat as possible to ensure that the decision-making ability is closer to the customer. Vodafone’s employees are encouraged to take personal responsibility for their choices and to strive to delight customers.
- In order to meet it’s objectives via its people, Vodafone recognize the importance of outstanding internal communication. The Vodafone team need to be informed, engaged and enthusiastic so that they can anticipate customer needs and deliver greater quality and value, faster than anyone else.
- The Vodafone internal communications team were looking for a way to communicate with their people in a unique innovative, fun, and effective way. SnapComms were able to offer Vodafone such a solution. Working closely in partnership with Vodafone, SnapComms customized existing offerings and developed a new tool to meet Vodafone’s internal communications requirements.
- With the aid of the SnapComms tools, informed, enthusiastic, empowered staff can continue to deliver the mind-blowing experience that customers have come to expect from Vodafone.
Vodafone’s internal communications objectives
Prior to using the SnapComms tools, Vodafone were looking for ways to overcome a number of internal communications issues:
All staff emails were viewed as a junk medium due to high usage. In most cases they were ignored, in some cases they were automatically trashed. Hence cut through for important messages was difficult to achieve
Low staff survey response rates. Staff Surveys were generally posted in the intranet and a link was sent out via email. Due to the issues associated with email volumes and all staff emails, the response rate to staff surveys was low. Managers needed to chase staff in order to ensure that important employee surveys were completed.
Free up team meetings. Team meetings were filled with reminders, business updates, product and service updates etc. Vodafone wanted to ensure that team meetings were efficient, effective and focused on their goals – not spending time covering off ‘housekeeping’ issues.
Centrally manage the internal communication process. It was difficult to centrally manage the number and diversity of messages being put out by different areas of the business.
Drive intranet usage and help people find the information they require. Vodafone were moving to a global intranet which due to its sheer size would be harder to navigate. They were looking for a tool to help direct people to the information they needed.
Gather staff feedback easily. To ensure excellence in every area of the business and involve employees, Vodafone were looking for a means to easily gather staff feedback regarding everything from external contractor performance to preference on future possible brand images.
Timed, targeted employee communications. To ensure employees were able to focus more on customers and less on administration, Vodafone were looking for an internal communications tool that would allow them to receive only targeted internal communications that were appropriate and beneficial to the individual and that were timed to fit in with the employee’s work flow.
Vodafone were also looking for a cost effective, high impact way to ensure their continued performance in the following areas:
- Employee brand alignment
- Employee involvement, commitment and enthusiasm
- Vodafone’s ‘one team’ culture and ‘I Belong’ community spirit
How Vodafone met its internal communications objectives
Vodafone worked closely with SnapComms to develop a solution that met all of their communications objectives. The Vodafone / SnapComms tool set consists of:
Corporate Screensaver Messages images and animation to convey corporate communications messages
Desktop Alerts to ensure cut through for important business messages
Staff Quiz Tool
Staff Survey Channel
User generated newsletters staff magazines, automatically published and allowing all staff are able to submit articles
All of the SnapComms tools are administered by the Vodafone internal communications team via the ‘Content Manager’. This is a web based management interface that permits the creation and targeting of messages.
Corporate Screensaver Messages - Screensaver images and animation to convey messages
Prior to the use of the SnapComms tool, the Vodafone default screen saver consisted of the user’s name and telephone number. Now the Vodafone screen savers are used as live bill boards to project brand messages, business goals, motivational messages, promotion of events, to inspire staff to submit business feedback and ideas, to drive intranet usage (the user can click through to more information regarding a product or service) and to build employee involvement (e.g. to preview new advertising campaigns).
Screen saver updating staff with the latest product offerings
Desktop Alerts - Pop up staff surveys
Vodafone recognize that their employees often have vital insights with regard to important business issues or have ideas for how to improve business performance. SnapComms Survey tool allows Vodafone to capture these insights and suggestions.
The Survey tool also allows Vodafone to measure cultural and behavioural shifts. An example is Vodafone’s ‘i.commute’ survey which tracks how staff travel to and from work. Vodafone is promoting fresh ways of travelling to work as part of its Corporate Responsibility program. The survey shows that, compared with two years ago, there's been great progress with more staff using public transport and less driving alone in their cars.
“The SnapComms Survey tool is a great benchmarking tool”
Annette Culpan Vodafone NZ Internal Communications manager
Example of the ‘icommute’ staff survey
Staff Quiz Tool - Pop up staff Quizzes
Vodafone use the Staff Quiz tool to build awareness and reinforce knowledge of key products, services and projects. By utilizing interesting themes and offering great prizes, Vodafone is able to ensure high participation rates
Example of Snap staff quiz
User generated newsletters - Electronic Staff Magazine "The Lot"
Vodafone wanted to reduce the number of ‘all staff’ emails and to build community spirit and staff engagement levels and came up with the concept of an online staff magazine. The Vodafone internal communications team worked closely with SnapComms to turn this vision into a reality.
Example of ‘The Lot’
The Lot (Staff Newsletter) is used to:
• Welcome people to the business and farewell those leaving
• Run fun competitions
• House keeping updates – car park sharing update, use of meeting rooms etc
• Advertise internal staff vacancies
• Classified notice board
• And other employee engagement notices
The format allows users to both submit articles and to receive the final published version.
“The Snap internal communications tools brighten the office making it more vibrant. It has positively impacted staff engagement levels and brand alignment”
Matt East, Vodafone NZ Internal Communications
The results speak for themselves (Vodafone staff survey)
• 50% of people notice a screensaver every time a new one comes out
• 80% of people thought screensaver content was ‘excellent’, ‘really good’ or ‘pretty good’
• 70% of people though Snap News content was ‘excellent’, ‘really good’ or ‘pretty good’
• 90% of people do a Snap Quiz ‘every time one comes out’, ‘quite often’ or ‘sometimes’
• 80% of people ranked Snap Quiz content as ‘excellent’, ‘really good’ or ‘pretty good’
• 2,500 people read ‘The Lot’ (Snap Mag) every month
• 50% of people read ‘The Lot every time it comes out’ or ‘quite often’
• 80% of people ranked ‘The Lot’ as ‘excellent, ‘really good’ or ‘pretty good’
India Inc has been surging ahead audaciously with the support of its Information Technology developments with its repertoire of resources. Global players have been eying the Indian market, owing to immense opportunities that the continent provides; both in terms of expansion and profit. Investment patterns in India have shown positive growth over the years with significant process on the de-regulation front. India has been greatly involved with the G-8 and G-20, including signing of the Double Taxations Avoidance Agreements/Treaties (DTAA) with various tax-haven countries. This has boosted the image of India as a 'lookout destination' for investment and an emerging hub for economical activities. World Report 2010 ranked India as the 9th most attractive investment destination, while Bloomberg Global Poll conducted in September 2010 put India in the third position, above the United States of America (US).
However, the very same image is said to have taken a beating with the recent Vodafone Tax case, which has been revolving in courts since 2009. With clear signs of the court ruling in favour of the tax authorities, many global companies are said to be rethinking their investment plans in India, keeping in mind the impact of the judgment on the taxation front. The Doing Business Report 2011 of World Bank has ranked India at 134, below neighbouring countries like Pakistan and Bhutan. This is a result of procedural difficulties for start-up companies and investment companies, in India and abroad.
Tax regulations play a major role in cross border transactions and investments in a country. Tax havens, open borders and DTAA countries are major destinations for investment through Foreign Direct Investment (FDI) or other routes. The Vodafone tax case throws an interesting question on the taxability of a non resident company acquiring shares of a resident company through an indirect route. This is a landmark case, as it is for the first time that the tax departments have sought to tax a company through a mechanism of tracing the source of acquisition. While we have heard about lifting the 'corporate veil', this instance has set a rare example wherein the Indian tax authorities have gone to length to interpret the existing tax laws, to bring a global company like Vodafone to its tax ambit.
Vodafone International Holdings BV, based in Netherlands and controlled by Vodafone UK, obtained the controlling interest and share of CGP Investments Holdings Ltd (CGP) located in Cayman Island for a value of $11.01 billion from Hutchinson Telecommunications International Ltd (HTIL), which had stake in Hutchinson Essar Ltd (HEL) that handled the company's mobile operations in India. HEL had its stake in CGP Holdings, from which Vodafone bought 52 per cent of HEL's stake in 2007, thereby vesting controlling interest over them. The Bombay High Court, on September 8, ruled that where the underlying assets of the transaction between two or more offshore entities lies in India, it is subject to capital gains tax under relevant income tax laws in India. The Court invoked the nexus rule wherein a state can tax by connecting a person sought to be taxed with the jurisdiction, which seeks to tax. The treatment of the company as an Assessee in Default (AID) under Section 201(1)1of the Income Tax Act and reading Sections 5(2)2, 9(1)3 and 1954, the court came to the conclusion that Vodafone was liable to deduct tax at source (TDS). Vodafone has now appealed before the Supreme Court to revisit the judgment, which makes them liable for a record amount of Rs 12,000 crores going to the tax authorities' kitty.
Vodafone raises pertinent questions on the issue of taxation of non-resident entities. The judgment will have direct impact on transactions of major acquisitions like SABMiller-Foster and Sanofi Aventis-Shanta Biotech. Similar transactions that existed earlier are Sesa Goa, AT&T and General Electric. British firm Cairn Energy has already agreed to pay tax in India as well as the UK on selling its stake in Cairn India to Vedanta Resources from $6.65 billion to $8.48 billion. Depending upon the size of the stake sale, the tax liability could range between $868 million and $1.1 billion. The judgment would definitely throw a cautious note to major investors and M&As in India; however, it does not have that great an impact to curtail the investment flow to an emerging destination like India. The judicial propriety of the case is still to be settled when the matter comes for final stages in the Supreme Court. Going by the events in the lower courts, the Supreme Court is unlikely to disturb the Bombay High Court ruling.
The global community is keenly watching the current trends happening in the Indian subcontinent, especially since it has become an emerging player at the socio-economic and political levels. United Nations Conference on Trade and Development (UNCTAD) has reported that India is set to dislodge the US by December 2012 to become the second best destination for FDIs, the major component of which is M&As. India is also set to revamp its taxations norms with significant changes at the regulatory level. The proposed Direct Tax Code contains key provisions, which will have a major impact on investments in India5. India has improved its rankings in the WB 'Doing Business' Report on the number of regulatory changes taken in the existing year. This shows that the country is set to make a global footprint by branding itself as a 'Must Invest' destination.
The Vodafone tax case has given India the opportunity to create a model for other countries, which follow source-based taxation principles6. It is an opportune time to bask in the glory of India, which is said to have had one third share of the world market in ancient times, as pointed out by economist Amartya Sen in his book . Let's hope that we can revive the 'Real India' soon.
1. Section 201 of the Act broadly provides that any person (referred to in Section 200 of the Act), and in cases referred to in Section 194, the principal officer and the relevant company, who does not deduct the whole or any part of the tax, or after deducting fails to pay the tax as required by or under the Act, he or it shall, without prejudice to any other consequences which he or it may incur, be deemed to be an 'assessee in default' in respect of the tax.
2. Section 5(2) enunciates that the income of a non-resident from whatever source derived is included in the total income if (i) it is received in India; (ii) deemed to be received in India; (iii) accrues in India; (iv) deemed to accrue in India; (v) arises in India; or (vi) deemed to arise in India.
3. Section 9(1) explains the circumstances in which income is deemed to accrue or arise in India and includes all income accruing or arising in India, whether directly or indirectly (a) through or from any business connection in India; or (b) through or from any property in India; or (c) through or from any asset or source of income in India; or (d) through the transfer of a capital asset situated in India.
4. Section 195 provides for deduction for tax at source upon a payment to a non-resident or foreign company
5.The proposed DTC says that if 50 per cent of the value of the shares being transferred is derived from assets situated in India, it is deemed to be taxable in India.
6.Countries like India have been following resident-based taxation mechanism, wherein whoever is the resident of India is taxed. Source-based taxation provides for a taxation regime which goes into the source of the asset which is liable for tax.
The author is a Project Associate with ADR Centre, Centre for Public Policy Research. He can be reached at firstname.lastname@example.org