Apr 06

Vodafone: an unexpected surprise

Friday, November 29, 2013

Analyst Event Reprise:
Vodafone reveals crisp, consistent offerings for businesses globally
Vodafone is an exception as a telco.  It has a heritage in mobile communications, albeit most commonly associated with consumer mobile.  Yet, from the outside, it has increasingly appeared over recent years to be acquiring the slow, stodgy habits of conventional, and primarily fixed-line, telcos, whose managements still seem to think they are in the business of running networks, rather than satisfying customers.  At its 2013 Analyst Event, in early November, Vodafone put any such thoughts to bed; at least where businesses are concerned.
The last 18 months has been busy for Vodafone.  It has:
  •  acquired Cable & Wireless Worldwide (CWW) and made progress in rationalizing and exploiting its purchase
  •  negotiated a $130bn divorce from Verizon (along with a handsome amount of increased investment; an additional £7bn or so, over the next 2 years)
  • obtained approval to acquire Kabel Deutschland, which, as with CWW, brings fixed line capabilities and thus the potential to make triple, or even quadruple-play services available in Germany
  •  established Vodafone Group Enterprise (VGE); a unit specifically focused on supplying businesses with the global communications that they need – whether via mobile, fixed or satellite networks and across cloud computing/data hosting, M2M, and others

You might have argued that this is standard fare for any large telco.  What was not standard, was the crispness, consistency and clarity with which Vodafone presented where it intended to go.  From CEO Vittorio Colao’s broad picture down to Nick Jeffries (the CEO of VGE) and his many reports, it was clear that they, as an executive group, wished to satisfy what businesses – from the largest multi nationals though to SMEs – want from a blend of mobility and fixed networks, made available around the globe (in this context alone the CWW acquisition makes particular sense).

 A welcome addition, from a customer point of view, is that VGE is ‘above the local country operating companies’, which in the past have had the ability to frustrate customers.  Why is this important? If you are a multi-national, which wishes to deliver an international solution, you can now deal with Vodafone (via VGE) at one point, where decisions will be made and passed through to the Vodafone operating companies.  Rather than having to negotiate multiple times in multiple places, you will be able to negotiate just once with VGE, and then VGE will ensure delivery across the local operating units.  In times like now, when large organisations want to contract out communications, this is far preferable to fighting endless battles within one supplier.
Does all this mean that Vodafone will deliver on its objectives?  Who knows?  Only time will tell.  However, if the senior ranks of an organisation as large as Vodafone can describe what they are trying to do as straightforwardly as was conveyed, it is probable that those in the lower ranks of Vodafone will not only hear, but also understand, what they need to do and why they need to do it, in order for Vodafone to achieve its targets.

Vodafone is not unique in the offerings it discussed.  It will have plenty of competition from traditional telcos, proffering what they believe to be not dissimilar portfolios.  Where Vodafone does score well is that it understands most aspects of mobility and realises that mobile data will be a business differentiator, where its experience can deliver.  As an intriguing extra, it seems that the sheer volume of anticipated data that businesses (and consumers) are already using, will mean that 2G networks will not be switched off (as many expected).  Instead, 2G will continue to supply connectivity for years to come, despite their lower data rates (possibly suitable for certain forms of M2M).  Indeed, in Germany, Vodafone proposes to invest more in 2G in the next 2 years, as well as in 3G and 4G.

[First published, Friday, November 29th, 2013:

Leave a Reply

Your email address will not be published. Required fields are marked *