Time for change at Vodafone?

Time for change at Vodafone?
Vodafone’s quarterly results are always a useful guide to how the mobile industry’s faring and its most recent announcements, at the end of July, pointed to many parts of its business that are doing well after a couple of indifferent years.

More interesting, though, were the frequent references to a ‘new strategy’ by CEO Vittorio Colao. He summed up this new philosophy as ‘the data bet is the right bet’. The full details will be revealed later in the year, but Colao dropped some heavy hints about the company’s new direction. For me, the most important ones were:

• An avalanche of smartphones and an explosion of data on its networks are driving this new strategy from Vodafone.

• Vodafone is confident that it can cope with demands for data capacity and is so ‘comfortable with the economics’ of smartphones and data traffic that they will form the core of this thinking.

• Typical Vodafone subscribers will spend €2 to €10 more each month once they purchase a smartphone.

• Vodafone is investing heavily in new billing platforms to address the challenges of pricing data tariffs.

• It intends to charge for data based on ‘time, speed, amount, family group and even by device’ as these new billing platforms become available.

• Vodafone will step up its smartphone strategy to reach all segments of the market, from low-end to high-end users.

What struck me about all this talk of a new strategy was that it only focused on network access and how to charge for it. Content, applications and services weren’t discussed. They may come in the announcements in the autumn, but there wasn’t even a hint of them in the results announcement. Vodafone 360 was conspicuously absent from Mr Colao’s comments on the company’s second-quarter results.

The Vodafone 360 product has been hugely troubling for Vodafone. It’s desperately trying to get its service to a mass market, but it’s being met with indifference from a public that wants smartphones — just not Vodafone smartphones.

The mobile industry’s changed more in the past 18 months than the last
18 years. Vodafone’s trying to find its place in this new world and I wonder if this new strategy will see it beginning to acknowledge that while it’s still a master of the operator universe, people are looking for much more than just a mobile network now.

I don’t see how Vodafone can meet these broader requirements — others do it much better. Indeed, it may be better to focus on different marketing needs. Vodafone’s VIP promotion in the UK has been far more effective than Vodafone 360 and seems to be taking the marketing spend right now. Of course, we’ll see what Mr Colao says in the autumn, but the lack of return on investments in Zyb and Wayfinder must be weighing heavily on the board’s mind when it comes to decisions on internet services.
Written by Mobile Today
Mobile Today


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