Vodafone reveals 5G plans, cost control and investment areas

Vodafone Group CEO Nick Read has revealed the telecom operator’s global plans in 5G, cost control and investment areas.
Vodafone 5G networkVodafone Group reported revenue of €39.22 billion (–4.5 percent) during fiscal 2018-19 as compared with €41.066 billion in fiscal 2017-18.

Vodafone has slashed its Opex to €10.947 billion from €11.313 billion. Vodafone reported a net loss of €7.644 billion against a profit of €2.788 billion – mainly due to its India business that was merged with Idea Cellular.

Vodafone aims to build Europe’s largest 5G network, reaching over 50 cities by the end of fiscal 2020 following commercial launches during the summer.

Vodafone today announced the company’s plans to launch 5G network in seven cities across the UK in July 2019.

Vodafone has acquired 3400MHz spectrum in the UK, 700 MHz / 3700 MHz spectrum in Italy and 3700 MHz spectrum in Spain to support the rollout of 5G service.

“In addition to potential new revenue streams, 5G’s improved spectral and energy efficiency supports up to a 10x reduction in the cost per Gigabyte, which will allow us to limit future growth in network operating costs despite strong expected traffic growth,” Nick Read said on Tuesday.

Vodafone aims to both cross-sell additional products such as broadband, family SIMs, TV, etc. and up-sell new experiences including higher-speeds with 4G Evo / 5G, low latency mobile gaming services and a range of Consumer IoT devices.

“Our objective is to increase revenue per customer and to significantly reduce churn as an increasing proportion of our customer base becomes converged over time,” Nick Read said announcing the earnings report.

Vodafone’s second brands ho. in Italy and Lowi in Spain and sub-brand Voxi in the UK have done well during the year.

Vodafone will be using digital technologies such as big data analytics, artificial intelligence agents and robotic process automation (RPA) to transform the group’s operating model, improve the customer experience and reshape cost base.

Vodafone increased the proportion of mobile customers acquired through digital channels to 17 percent compared to 9 percent two years ago, helping to reduce commissions paid to third party distributors.

Vodafone said 28 percent of customer acquisitions are online in fixed business. Vodafone has deployed TOBi chatbots in customer operations in 11 markets and will be expanding this to 5 new markets in fiscal 2020.

The investment in TOBi chatbots in customer operations has assisted Vodafone to achieve 12 percent year-on-year reduction in the frequency of customer contacts to call centres in Q4 fiscal 2018-19.

Vodafone deployed Robotic Process Automation bots in shared service centres and reduced over 1,600 FTE roles.

Vodafone has started adopting simplified pricing plans, and will phase out complex legacy pricing structures. Lower complexity will benefit customers, front-line employees and back-office operations, allowing significant savings in IT costs and greater commercial agility.

Digital only products such as Vodafone Bit in Spain, Ho. in Italy and Voxi in the UK have lower commissions and operating costs.

Vodafone has centralised over 80 percent of procurement. Vodafone has 21,000 employees in its shared service centres in India, Egypt and Eastern Europe. Vodafone will be centralising European network design and engineering functions, as well as IT operations.

Vodafone said it aims to reduce operating expenses in European operations including common functions by at least €1.2 billion by fiscal 2021, compared to fiscal 2018.

Baburajan K