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Telecommunications Vodafone looks beyond mobiles
Telecommunications Vodafone looks beyond mobiles | Vodafone looks beyond mobiles |
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| by Stuart Corner | |
| Wednesday, 31 May 2006 | |
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See also: Vodafone does the global splits
Vodafone Group has delivered wide ranging manifesto setting out major strategic shifts, the most radical of which is that it will be a 'total communications supplier' by, initially reselling DSL services and integrating PC, internet and mobile services to offer "seamless interoperability". Vodafone also plans to introduce advertising based services and business models that customers will view as the most appealing and acceptable. In the first step Vodafone Germany will launch bundled homezone products with DSL access provided by Arcor, in the third quarter of the current financial year. Such a move was perhaps inevitable in the face of the growing momentum towards converged services. At a recent regional press conference, focussed on the company's converge strategies, a senior Alcatel executive went so far as to predict that "the days of the mobile only player are numbered". As it moves into this space Vodafone will be up against stiff competition from fixed line operators who have more experience in delivering a diverse range of services to a diverse range of customers and who in many countries operate both fixed and mobile networks. Vodafone believes that its "mobile centric approach in satisfying customers' total communications needs" will deliver competitive advantage in the marketplace as it focuses on customers' two basic preferences – for mobility and personalisation. It has already launched initial offerings including Vodafone Zuhause in Germany and Vodafone Casa in Italy, which feature cheaper call rates over the Vodafone network when the user is at home or close by. Another key factor, Vodafone says will be an upgrade of its 3G networks to HSDPA "which features greater capacity and higher data rates, the availability of complementary new broadband technologies including DSL and the opportunities for service creation based on IP technology." However it seems unlikely that HSDPA will be able to match wired or fixed wireless broadband services in either cost or ability to serve large numbers of users over a limited areas. So it could well be that Vodafone moves to gain better broadband access by buying a fixed broadband operator. Carphone Warehouse, Europe's top cellphone retailer, has embarked on a strategy to transform itself from a high-street retailer into an alternative telecoms operator and plans to install DSLAMs in about 1,000 telephone exchanges. Other components of the manifesto were - Cost reduction and revenue stimulation in Europe "The key areas of focus for the Europe region will be cost reduction and revenue stimulation, reflecting a more mature mobile marketplace." - Deliver strong growth in emerging markets Emerging markets are expected to generate an increasing proportion of Vodafone's growth in the next few years. - Actively manage Vodafone's portfolio to maximise returns Vodafone will seek to optimise its portfolio of assets, either disposing of assets where it believes it cannot earn a superior return or investing in businesses where it believes it can create substantial additional value for shareholders. This will renew speculation that its Australian operation will be on the block. CEO Arun Sarin, denied this two years ago in an interview with an Australian newspaper, but today's announcement suggest that Vodafone, which likes to be number one or number two in every market in which it operates, will be taking a long hard look at its Australian operator, currently in number three position and facing stiff competition from newcomer Hutchison as well as incumbents Optus and Telstra. Vodafone says the financial impact of the new strategy should lead to flat revenues for 2006-2007and a slight decrease in EBITDA. It made no mention of the 600 jobs which earlier speculation suggested it would cut in today's announcements.
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