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Vodafonewatch Report #89 February-March 2011 Executive Brief

16 March 2011

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Executive Brief from Vodafonewatch, report #89. Click through for: an Extract from this month’s report; the Report Snapshot; or to contact us for more information about the full 82-page report, this industry standard monthly report service, and ongoing subscription access.

 

     

  1. GROUP: The Group’s Q3 FY10-11 financials reflected continuing recovery, post downturn, but with malaise in southern Europe operations remaining a large drag on this progress. Vodafone’s rate of service revenue growth accelerated to 2.5%, but was restricted by contraction at Vodafone Italy, Vodafone Spain, and other OpCos afflicted by low consumer confidence and Eurozone weakness. On the plus side, data revenue continued to expand rapidly (+27%), with encouraging signs for the Group’s value added service push in emerging markets. Vodacom Group was one star performer, and now could be seen as an ‘emerged’ rather than ‘emerging’ player, having risen to third place on contribution to sales. [pp.4-13,42,43,51,55,57-59,66,73,74.]
  2. One milestone in the financials was that data overtook messaging as a revenue stream for the Group, helped by the emerging market growth, and an apparent positive response to ‘tiered’ plans in Europe. However, executives said organisation of sales along these lines may soon become obsolete, thanks to growing prevalence of service bundles. [pp.5,19.]
  3. The prospect of Group exits from Polkomtel and SFR appeared to edge forward, with: several preliminary bids now said to have been received in the former’s full sell off; and Vivendi reported to have initiated contact with Vodafone over the latter. Meanwhile, the Group continued to renew and reorganise its ties with other international investments, both past and present — a “strategic co operation framework agreement” was signed with China Mobile; and Verizon Communications and Vodafone pledged to reinvigorate cooperation on multinational corporate accounts, first mooted years ago. Talk also resurfaced of an enlarged commercial agreement with SFR, should Vodafone sell its stake in the French operator. [pp.17,18,20,27.]
  4. Vodafone Global Enterprise’s (VGE) global operations continue to mushroom, with news reaching Vodafonewatch of a plan to boost its fixed line presence through the establishment of a “Centre of Excellence”; and VGE inking new partnerships (with Bosch Group, Hyundai Motor Group, and Intel) dedicated to boosting its machine to machine communications division. The unit also continues to drive Vodafone’s international footprint, pushing an expansion of Vodafone’s Partner Markets relationship with Taiwan’s Chunghwa Telecom. [pp.20-22,25.]
  5. The true scale of 2010′s management clear out at challenged Vodafone Ireland came to light, with a series of “voluntary” Board level departures emerging. [pp.25,26.]
  6. Nokia Siemens Networks was among several vendors working to boost their Vodafone account units, recruiting for its Managed Services team, and seeking to build recent network management deals with Vodafone Hutchison Australia and Vodacom Tanzania. [pp.30,41,77.]
  7. The Vodafone backed Wholesale Application Community trumpeted its commercial launch at February’s Mobile World Congress in Barcelona, as member operators seek to regain a semblance of control over the mobile application value chain. [pp.33,34.]
  8. EUROPE: Visibility remains poor into the future regulatory environment in some of Vodafone’s more peripheral Europe Region markets, with: Greece announcing, as feared, that it will soon competitively re auction part of Vodafone’s 2G spectrum holdings; and Ireland yet to detail spectrum allocation plans, despite Vodafone’s 900MHz concession also nearing expiry. The Albanian government signalled it is planning to introduce additional taxes and price regulations on the telecoms and banking sectors. [pp.41,49,50.]
  9. Vodafone Germany’s software as-a service reseller partnership with Microsoft appears to have finally got off the ground, two years after its original announcement. [p.44.]
  10. Vodafone Greece, Vodafone Italy, and Vodafone Spain launched Dual Carrier HSPA technology, as part of the Group’s ongoing network upgrade programme in Europe. Vodafone Ireland is also testing the system. Meanwhile, it was revealed that Vodafone Netherlands is quietly rolling out EDGE technology, to help strengthen its network, following apparent fragility in the last year or more. [pp.49,50,53,54,56.]
  11. Vodafone Spain separately appeared to be setting itself for 900MHz reorganisation with a project to roll out UMTS900 technology along one of Spain’s high speed train lines. [p.56.]
  12. A break in at one of Vodafone UK’s exchanges caused a widespread network outage, hurting marketing efforts around infrastructure strength. The problem came as the OpCo began a project to strengthen coverage in London. [p.60.]
  13. AFRICA, MIDDLE EAST, AND ASIA PACIFIC: Continuing the theme of network trauma, Vodafone Hutchison Australia is seeking to repair its recently battered reputation by handing a contract to Huawei Technologies to revamp its entire radio access network, including replacement of all 8,000 base stations. Sister OpCo Vodafone New Zealand is said to be about to rejig its coverage in major stadia, ahead of the upcoming Rugby World Cup. [pp.61-63,71.]
  14. January and February 2011′s political unrest inflicted some damage on Vodafone Egypt, not least by highlighting vulnerabilities of offshoring to the country — something the Group itself is increasingly doing, as part of ongoing efficiency measures. [pp.63,64.]
  15. Both Vodafone Ghana and Vodafone Essar are close to launching 3G services, as they wrestle for mobile data leadership in their respective markets. [pp.64,66.]
  16. Expansive passive infrastructure joint venture Indus Towers continues to grow in importance to the Group: helping Vodafone Essar return to sequential service revenue growth in Q3 FY10-11; and pledging to add 5,000 towers per year to its 110,000 mast base going forward. The venture has also initiated a pilot programme to replace diesel generators on many of its towers, in a move that could ultimately have a large impact on Vodafone’s Group wide carbon emissions and energy costs. [pp.66,68,69.]
  17. Safaricom continued to strengthen its operations, amid increasing competition, raising new funds through the latest tranche of its corporate bond programme, and promoting opportunities around roll out of ‘mass market’ smartphones. [p.70.]
  18. Vodacom Group appears to be readying a more aggressive posture for the coming financial year (FY11-12). The company flagged the benefits of promotional activity and data uptake in recent months, as well as detailing plans for a major branding overhaul in the next few weeks. Rumours also continue to surface of expansion plans in Nigeria. [pp.73-76.]

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About Vodafonewatch

Report: #89
Covering: February-March 2010
Published: March 2011
Next report: April 2011

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Written by AB · Filed Under Vodafonewatch 

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