Vodafone Group’s CEO has dismissed EE’s recent 4G launch as not having a ‘huge impact’ on the market, but admitted he was disappointed not to launch his own next-generation service.
Vittorio Colao was speaking as the operator revealed its half-year results for the six months ending 30 September. The ailing Spanish and Italian economies heavily hit the operator, with Vodafone writing down £5.9bn in both markets. It made a net loss of £1.89bn, compared with a £6.6bn profit last year. Group service revenues were down 7.9% to £20.16bn, or down 0.4% on a like for like basis.
Speaking to journalists, Colao was asked what the impact of EE’s launch last month of 4G services across 11 cities was. Vodafone is unable to launch its own 4G service in the UK until late spring next year, following the completion of Ofcom’s spectrum auction. Colao said: ‘I don’t think there will be a huge impact… It’s disappointing Vodafone and others are not able to launch when you have 4G services in Lisbon, Pretoria, Bucharest and Milan. But we have a very good network experience. When we get 800Mhz frequencies [after the 4G auction], it will give us much better quality and service than the LTE on 1800MHz.
'Having said that, I use an iPhone 5 and I can stream television and use other services today. There’s a little bit of marketing hype in the EE position, which is exactly what I would do if I was them, so well done.’ He added the only way this might change is if EE was to change the terms of its 4G offer.
Colao said the business aimed to put data at the centre of its bid to bounce back. Its recently launched Red tariff, which offers unlimited calls and texts, will be rolled out to other European markets after its launch in the UK. Vodafone said it expects data usage to increase ‘significantly’ as smartphones get cheaper and high-speed networks are rolled out in more markets. Colao said: ‘[Red is] a very important move which in the long term makes the company more aligned with the customer.’
The UK fared better than the wider group performance but Vodafone said it had been spending heavily in a bid to keep up with rivals’ unlimited tariffs. Profits were also hit by the economy and consumers tightening their belts on out-of-bundle spending. Service revenues fell by 2.1% during the half year and operating profit was £132m, compared with £185m in 2011.
Editor: Graeme Neill