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Vodafonewatch issue 2010.05 Executive Brief

5 June 2010

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Executive Brief from Vodafonewatch, issue 2010.05. Click through for: an Extract from this month’s report; the Issue Snapshot; or to contact us for more information about the full 68-page issue, this industry standard monthly report service, and ongoing subscription access.

  1. GROUP: Vodafone Group released its FY09-10 results, with positive signs emerging of stemmed declines in Europe and a turnaround of fortunes for Vodafone Turkey. However, concerns over emerging markets’ prospects were heightened by a goodwill write-down of Vodafone Essar and Regional slowdowns. [pp.3-5.]
  2. Increasing expectations of future Vodafone divestments turned, unexpectedly, to Vodafone Egypt, with talks being held over a sale to junior shareholder Telecom Egypt. Although the discussions came to nothing, the move indicated that relatively well performing operations, and those that are majority controlled by the Group could be put into play as the Group seeks to boost its chronically under appreciated asset portfolio; not just minority interests such as SFR and Verizon Wireless. Egypt’s Orascom Telecom was also said to be interested in the VE holding, as well as being linked again with a buyout of Vodafone’s Polish partners at Polkomtel. [pp.6-9,44.]
  3. Charles Butterworth is to leave his position as Chief Executive of Vodafone Ireland, and return to the UK. He will be replaced by Vodafone Netherlands Enterprise Director Jeroen Hoencamp. Group non-executive Director Simon Murray is to step down, increasing suspicion that something may be afoot involving (or not) Hutchison Whampoa. [pp.9,11.]
  4. Another review is to be launched within Vodafone’s under scrutiny Group Marketing department — this time of Vodafone’s voluminous “global brand identity and guidelines”. The unit’s revolving door also continued to turn with two new appointments. [pp.12,13.]
  5. Vodafone’s bi polar relationship with Google saw the operator seek support for new fees for content providers, including the web services giant’s YouTube business, while also releasing a mid tier, own brand smartphone based on Google’s Android platform. The two companies’ partnership on Google’s Nexus One handset was also upgraded, marking a setback for the US company’s presumed goal of reducing operators to “dumb pipes”. [pp.15,16,20-22.]
  6. Vodafone came out well from Germany’s strategically crucial ‘digital dividend’ spectrum auction, spending marginally more than main rivals T-Mobile Germany and Telefónica O2 Germany, but appearing well set for future network deployment. By contrast, runaway bidding in India’s 3G frequency sell-off led to questions over the Group’s strategy in the country. [pp.27,54,55.]
  7. EUROPE REGION: SFR was reported to be experiencing mobile data capacity difficulties in Paris’s key La Défense financial district. [p.26.]
  8. Vodafone Italy announced ambitious plans for shared fibre optic network rollout with rivals Fastweb and Wind, although it remains to be seen what form the project will emerge following negotiations with the government and incumbent Telecom Italia. [pp.28,29.]
  9. Both Vodafone Spain and Vodafone UK launched support for Research in Motion’s recently introduced BlackBerry Enterprise Server Express offering for SMEs, while the latter OpCo also revealed two further, RIM supported business-to-business contracts, with waste management group Biffa and IT firm Northgate Information Solutions. [pp.13,31,34,35.]
  10. Vodafone UK took tentative steps towards a tighter policy on mobile data users that breach monthly ‘fair use’ allowances, although it is unclear how far it will go amid risk of a consumer backlash. Separately, the OpCo gave two further indications of a more open and innovative approach to mobile virtual network operator (MVNO) partnerships, tying with enabler Teleena to serve niche virtual partners, and working with CPW-owned MVNO partner Talkmobile to offer an “overdraft” facility to the company’s prepaid customer base. [pp.32,36.]
  11. AFRICA & CENTRAL EUROPE REGION: An aggressive media campaign helped Safaricom stave off introduction of new, potentially-stifling competition rules by the Communications Commission of Kenya, but, even so, the company warned in its annual results of heightening regulatory challenges, including mobile number portability and prospective termination rate cuts (while also facing prospect of more aggressive competition from Zain Kenya following its purchase by Vodafone’s arch-emerging market rival Bharti Airtel). Nevertheless, the FY09-10 results were a testament to Safaricom’s success over the past year in defending its dominant position, with profit increasing 44%. [pp.38-40.]
  12. Further, Safaricom is to increase capital expenditure in the current financial year, helped by plans for another bond issue due to take place in the July-September 2010 quarter. Part of its spending will reportedly be allocated to a shift towards Internet Protocol (IP) based infrastructure. [pp.37,42.]
  13. The operator also continues to innovate at pace around mobile remittance platform M PESA , moving into the mobile banking sector for the first time, as well as helping launch a gambling adjunct to the offering. M PESA accounted for almost 9% of Safaricom’s revenue over FY09-10. [p.43.]
  14. Both Vodafone Romania and Vodafone Qatar launched 3G services in the 900MHz frequency band, extending their ongoing respective network expansion and upgrade programmes, while Vodacom tied with Novell on its recently announced regional cloud computing push. [pp.45,62.]
  15. ASIA-PACIFIC & MIDDLE EAST REGION: Vodafone Hutchison Australia continued post-merger optimisation by handing a sizeable, seven year network management contract to Nokia Siemens Networks. The OpCo identified branding and network capacity as key focuses for the coming year. [pp.47,49.]
  16. Reports in India suggested sizeable outsourcing contracts could be put up for grabs by China Mobile in the coming months, as the under pressure operator seeks efficiencies. [pp.50,51.]
  17. New Zealand’s long-running mobile termination rate dispute rumbled on, with Vodafone New Zealand seemingly shooting itself in the foot with the launch of a contentious, on network call friendly, prepaid voice add on. The move prompted a potentially damaging change of heart by the country’s Commerce Commission on MTR policy. Better received was the OpCo’s teaming up with Canadian telecoms group Axia NetMedia, to bid for involvement in New Zealand’s Ultra fast Broadband Network programme. [pp.58,59.]
  18. Vodafone Qatar is to take legal action over a tie up between incumbent Qatar Telecom and Virgin Mobile, claiming the move breaches the terms of its licence. [p.61.]

About Vodafonewatch

Issue: 2010.05
Covering: May/June 2010
Published: May/June 2010
Next issue: June/July 2010

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Written by AB · Filed Under Vodafonewatch 

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