Vodafone CEO Laurence bullish about turnaround

Vodafone CEO Laurence bullish about turnaround

Vodafone UK is back on track after adding a million customers over the last year, the network’s CEO Guy Laurence said last week.

‘Adding a million net customers is a nice round figure and our best performance for three years,’ Laurence said in an interview with Mobile last week (11 November). ‘I am very happy with our latest set of results. Compared to a year ago, it is a very different situation for Vodafone,’ he added.

In the three months to the end of September, Vodafone’s mobile service revenues grew 5.2% year on year and 3% quarter on quarter. This compares with 0.7% growth in the three months to the end of June and a year on year decline of 2.7% in the three months to the end of March.

Laurence pointed out that Vodafone UK has gone from 0.7% growth to 5.2%, so its rate of growth is accelerating more quickly than O2’s, which is, however, still growing according to its latest figures.

Vodafone has also begun to narrow the gap a little between itself and O2 on pre-tax profit cutting it from £106m in Q2 to £97m in Q3, while O2 saw margin slip 1.1% on the previous quarter to 25.3%  (up 0.2% year on year), Vodafone’s 23.0% margin fell by just 0.3% (up 0.6% year on year).

Laurence was bullish about Vodafone’s performance and future prospects, adding: ‘O2 has produced a fantastic performance for years, but the question is, has it now peaked? And the Everything Everywhere joint venture is having to deal with all the issues of integration.’

The Vodafone chief said that the 281,000 net customer additions in the quarter were primarily new ones. ‘Some have converted from prepay, but that is not the predominant source,’ said Laurence. ‘We ask our customers why they join and 68% said it was for the quality of the network and value for money, so our marketing campaign to push the quality of the network is definitely working.’

In July this year, Laurence said the sorting out the company’s prepay segment was a priority. One of the first moves to appeal to prepay customers was the launch of its Freebees offering last week, whereby when prepay customers top up they can choose from a range of free texts, internet access or international calls.

‘Freebees is the umbrella brand,’ said Laurence, ‘but you’ll see a lot more offers in the run up to Christmas, such BlackBerry on prepay; top up and get something free offers; refreshes; iPhone on prepay; and we have a range of tablets coming out.’

Vodafone has been particularly aggressive at securing handset exclusives over the year, as Laurence explained: ‘Because of our scale as a group, we can attract manufacturers to give us exclusives worldwide and then use that in the UK, so it is a competitive edge we have at the moment.’

Laurence said that the company’s recent restructure of its indirect channel has gone down well. ‘Our One Net converged service proposition is selling very well. I am very happy with the customer take up; half of the leads are new customers.’

Laurence was reluctant to say too much about its MVNO strategy for the moment. It recently brought in Cognatel as an MVNO aggregator. Laurence said. ‘We have a very clear MVNO strategy. We love them, they are not stepchildren, they are respectable sons and we have seen significant growth in that market.’

Written by Mobile Today
Mobile Today


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