Vodafone has signalled a change in its relationship with third party retailers after its Group CEO said he wanted to ‘bring the customer experience back into our hands’.
Vittorio Colao was speaking as he revealed its £7bn ‘Project Spring’, a plan to extend its reach into consumers across Europe and emerging markets, as well as the enterprise sector by March 2016. Vodafone is investing £300m into the United Kingdom, in addition to the £900m it announced earlier this year.
The cash will be plunged into building its 4G networks, rolling out additional retail stores and speeding up the deployment of its mobile payment services. Half of the £300m will be spent in London.
Colao said Project Spring is likely to lead to a greater focus on the direct channel. He said: ‘We see there is a turning point where customers are getting very used to smartphones and they need to get more service and more assistance. We want to take that back. It’s not about reducing share, it’s about being in control of customers. It’s hard to give a customer a Vodafone experience when someone walks into a shop where there is no Vodafone branding or staff trained by Vodafone. We want to bring the customer experience back into our hands.’
Colao’s comments raise the spectre of Vodafone’s falling out with Carphone Warehouse in 2006. The decision to walk away from the retailer was overturned by UK CEO Guy Laurence when he joined the company in late 2008. It is understood that Colao’s plans are a long-term objective and there are no immediate plans to walk away from the likes of Carphone Warehouse or Phones 4u in the UK.
The UK is one of five markets, which also include Italy, Germany, India and South Africa, that will receive the lion’s share of the Project Spring investment. Vodafone’s group CEO said the bulk of the UK’s cash would be spent in London because of its volume of consumer and enterprise customers. He said: ‘’We want to definitely lead in London because of the presence of enterprises and presence of high value customers, particularly those who are roaming and international citizens.’
The operator announced this week that it has already signed up 200,000 customers to its 4G service. For the six months to 30 September, Vodafone UK saw its mobile service revenue decline on a like for like basis by 4.3% to £1.54bn. Its operating profit increased by 20% to £702m.
It signed up 260,000 customers during the three months to the end of September, with 132,000 of those on contract. This compares to a net loss of 12,000 for the preceding three month period. Vodafone now has 19.5 million customers in the UK.