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Vodafone seeks to create mobile edge

The head of Vodafone’s underperforming UK business is staking its turnround on the quality of its mobile network.

Guy Laurence told the Financial Times that Vodafone had a network that could cope with bandwidth-hungry smartphones, led by Apple’s iPhone. O2, the largest UK mobile phone operator, has run into serious problems with its London network since the summer. The infrastructure has been periodically overwhelmed by the data applications running on smartphones.

Vodafone ceded the position of largest UK operator in 2006 to Telefónica’s O2, which strengthened its grip on the market by signing a deal to be the exclusive British network for the popular iPhone in 2007. Vodafone on Monday said it would start selling the iPhone on January 14, and its tariffs dashed consumer hopes of a price war.

Mr Laurence, who became head of Vodafone UK in January, said: “The iPhone is not a price war, it is a quality of network war. It is one I feel we are very well positioned to win.”

He predicted Vodafone would poach customers from rivals, and highlighted O2’s iPhone-related infrastructure problems, as well as more limited issues at 3 UK, owned by Hutchison Whampoa and the smallest network operator.

Mr Laurence also pointed to the challenges that France Telecom’s Orange UK and Deutsche Telekom’s T-Mobile UK face with their proposed merger. The deal involves collapsing their two networks into one.

Unlike Telefónica, Vodafone has not been cutting capital spending during the downturn.

Robin Bienenstock, analyst at Sanford C Bernstein, said Vodafone’s European businesses, including the UK, should be able to woo customers with their “shiny, faster, better networks”.

Mr Laurence was head of Vodafone’s Netherlands business when Deutsche Telekom combined its Dutch unit with France Telecom’s in 2007.

He said Vodafone was able to poach customers from T-Mobile and Orange then because the units were distracted by the transaction, and held out the prospect of repeating the feat in the UK. “I am certainly going to try.”

Vodafone UK revenue fell 7 per cent to £2.5bn in the six months to September 30, and earnings before interest, tax, depreciation and amortisation dropped 17 per cent to £583m.

Analysts reckon the business has made strategic mistakes, including spurning the opportunity in 2007 to be the exclusive UK network for the iPhone.

Mr Laurence said he wanted to restore revenue growth at Vodafone UK as soon as possible, but signalled he did not want to buy 3 UK.

Источник: Financial Times

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