Vodafone has claimed that its ‘different’ strategy in the UK market is ‘doing well’. Speaking at its year-end results, the Group CFO Nick Read said that the network’s method of attracting higher-value customers and selling them more services had resulted in good financial results: ‘What we’ve been doing well in the UK is bundling content into packages and getting uplift on the ARPU. That’s how our strategy is different from the other players in the market. We’ve attracted higher-value customers and then sold them more.
‘When you look at consumer contract revenue, we grew 4.5%. When you compare that against the competition that’s superior performance, it’s a sign that it’s the right customers that really use our service.’
The Group CEO Vittorio Colao also revealed that the network’s retail strategy may see them reduce the number of UK retail outlets ‘at some point’. ‘We already have very good results in terms of sales and the performance of UK shops. The ones that have been acquired and refurbished are doing very well and are self-financing. Clearly, the ones that were not subject to that refit and new investment probably will become more marginal and the number at some point might be reduced,’ he said.
Opening up about pricing in the UK, Colao said that he didn’t believe that BT would be too much of a disruptive force: ‘Who is irrational in pricing? Usually people who want to sell their business – they can become irrational because they want to create volume – or people who are desperate and don’t see a future and want to be consolidated. BT has bought the leader in mobile EE and is the dominant player in fixed, so it has a lot to lose if prices go up. You don’t spend £12bn to then thrash the prices.
‘I think we are pricing our packages well and customers are responding to that. The UK is the highest user of data in Europe; the net adds were lower across Europe, there has been a tuning down in terms of net adds. But I would say that most of it is the pricing, which is good.’
Colao also took the opportunity to air his views on both the EE/BT deal and the Hutchison Whampoa O2 takeover, saying: ‘If the Hutch O2 deal produces a strong player who can maintain competition, we’d be in favour of the deal.
‘In terms of the BT/EE deal there are three key points that have to be addressed. First, the network sharing between EE and Hutch has to be terminated. Second, the control of 60% of 4G frequencies that is currently in place must be reduced. Third, access to fixed line and fibre network – clearly the Openreach split would be the best solution. EE/BT will be two-and-a-half times the size of its closest competitor – you have to make sure that this is fair to competition.’
Vodafone confirmed once again that it would be launching broadband and TV services in the UK. Colao said that the offering would differ significantly from what was currently available on the market.