By Kevin Drayne
This morning Vittorio Calao, Vodafone’s Group CEO, announced the company’s results for the first half of the fiscal year along with a strategy update that laid out their future plans. As anticipated by the financial markets, results exceeded expectations with revenue increasing 3.9% over the same period last year. Continuing a familiar trend, data revenue increased by 25.9% and now delivers 11.7% of revenue, or £1,243M. This is up significantly from 9.5% of revenue in the same quarter last year. Growth on a geographical basis continues to come from Africa and Central Europe (20.1%) and Asia & Middle East (22.2%).
This growth has been fuelled by the increased usage of smart phones and other mobile data devices. Vodafone has also seen increased interest in broader data-based services like payments via handsets and an initial wave of mobile devices for homes and cars. In emerging economies revenue growth is still driven by increasing penetration of mobile devices. Data take up is low, but demand for basic Internet access is high, and to a large extent can only be satisfied by mobile networks.
With quarter-over-quarter mobile data growth of over 20% it is no surprise that this area features heavily in Vodafone’s future strategy. In fact it is Number 1 on the company’s 5-point growth strategy and consists of four elements:
• Continuing to invest in network expansion, not only in Europe but also in India and Africa.
• Moving to tiered data pricing plans and differentiated service levels, thereby giving customers more control and encouraging adoption.
• Enhancing customer care, retail presence, online services and support, to ensure that customers get the best data experience.
• Carrying a balanced portfolio of smart phones and connected devices to accelerate further smartphone penetration.
Like most large companies, Vodafone relies on a number of partners in order to achieve their strategic objectives. For these partners it is imperative that they have a firm grasp of the issues facing Vodafone. And for Vodafone, the customer experience and growing data usage are paramount.