Vodafone results – The trends behind the figures

I had a look like everybody at the latest Press release from Vodafone about their 31st March 09 results. Beyond the “we did the best during those tough times” and “we are cutting cost” what can we learn from those statements on the european market. >> see article on Vodafone cost cutting program

Vodafone Fixed Line activity is gaining momentum

I had a look at their revenue per line of activity in Europe. Voice is still the overwhelming service with roughly 68% of the revenue.
revenue per service
I zoomed at the other services. Messaging seems quite stable with 13% of the revenue. But what is really surprising is the Fixed Line revenue which is bigger than the Data revenue. Vodafone, once a mobile pure player, is now becoming a convergent operator as an Orange. Even if the data traffic is growing with 2 digits figure the fixed line activity is gaining momentum.
revenue per service ZOOM

3G devices penetration is at 30% of the customer base

3G devices are becoming mainstream in Europe with nearly a 1/3 penetration rate. As the 3G coverage is now nearly the same as the GSM thanks to the 900 MHz band, 2G will start loosing momentum before the end of the year.

3G devices penetration
2G network capacities are now at a plateau and all capacity investment will go now to 3G / HSPA technology. If you remember the NMT switchover at the end of the 90s, one can expect a 2G switchover between 5 to 10 years from now. This will depend on 2G OPEX vs. 3G OPEX. As soon as they will be close, 2G networks days will be counted.
One can expect the first 3G/HSPA only devices within oprators portfolio in 2010.

The crisis starts impacting consumers’ behaviour

Let’s have a look now at the ARPU in the main countries. ARPU is slightly decreasing in all the countries. That can be easily explained by the price pressure in mature markets. What is more stunning is the dramatic decline in Spain.
ARPU VF Opcos

If now we compare it with the average number of voice minutes used per month, this is a big shock. People are using less their phone in Italy and Spain! Apparently, Spaniards are cutting back on their phone expenses by talking less.

monthly voice mn usage per month

Telecom services are no longer immune to the current crisis. This average voice minute usage per user should be monitored closely by all the operators.

As a Conclusion,

  • The Fixed-Mobile business is now a standard model even for a Vodafone
  • 3G is on the edge of becoming the mainstream mobile technology in Europe
  • Crisis is there. Consumers in Spain and Italy are starting to cut back on their communication bill
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