November 25, 2013
With Dan Bieler, Henry Dewing, Henning Dransfeld, Brownlee Thomas, and Michele Pelino
Vodafone hosted its annual global analyst event in London recently, and it was a good event. Vodafone’s CEO Vittorio Colao kicked it off with a passionate endorsement of Vodafone’s enterprise ambitions. But will Vodafone’s market position as a leading mobile telco give it a tangible advantage in the broader enterprise global telecoms marketplace? We believe there is a good chance it will because:
- Vodafone’s integrated pitch is credible. Vodafone comes up in nearly every conversation with Forrester enterprise clients that want to consolidate vendors for multicountry or “global” mobility services. Increasingly, our clients also are asking about Vodafone’s wired services. And those based in the UK and Germany are the most interested in learning about what’s available and what’s coming with respect to fixed-mobile bundling. Vodafone made a big play on fixed-mobile integration, most notably with the acquisitions of Cable & Wireless and Kabel Deutschland. Its network now covers 140 countries, 28 of which support MPLS networks for mobile backhaul. Vodafone also has big plans for refreshing and expanding its international IP backbone network to more than 60 countries.
- Vodafone is serious about the enterprise sector outside the SMB space. Vodafone has shown its commitment to the enterprise market with a number of acquisitions. These include the addition of significant professional services with unified communications (UC), managed mobility, and IT practices to its portfolio through acquiring Bluefish Communications, TnT Expense Management, and Quickcomm. Vodafone already manages 3.3 million UC seats and has 1,700 multinational corporation (MNC) customers. Its 5,000 direct account managers were selected on merit, not on heritage. A number from the former Cable & Wireless were promoted to represent the entire Vodafone portfolio to their accounts.
- Vodafone is becoming more competitive in the enterprise space. Thanks to the consolidation of its fixed and mobile assets, Vodafone can lower its cost base and become more price-competitive for enterprise communications. Competitors should beware of the rising threat that Vodafone will represent to their business given its announcement of various initiatives, such as the aggressive promotion of flat-fee mobile offerings across European markets. However, to be successful in a price-sensitive region such as Asia Pacific, Vodafone needs to be more competitive on the pricing front. Initiatives aimed at reducing data-roaming costs and bill shocks (e.g., Vodafone Red, OneNet) will especially appeal to SMEs in Asia Pacific and Africa.
- Vodafone is committed to innovation. The C&W acquisition boosted Vodafone’s assets and ability to deliver cloud services. Vodafone’s cloud focus involves offering public and private cloud solutions and IaaS connected to its global MPLS network. Vodafone also pitches unified-communications-as-a-service (UCaaS) offers, based on Cisco’s HCS for MNCs and Lync for SMBs, as part of its OneNet offer family. Vodafone is investing in its future. Vodafone has €7 billion in the war chest to improve assets and services and its go-to-market ambitions. Any European telcos must have Vodafone firmly on the radar. Vodafone stated that the UK SMB fixed services market is a key target market to go after. As part of its innovation pitch, Vodafone invites clients into its facilities to spend a day as a highly connected mobile information worker. After that experience, Vodafone spends a half-day discussing how it can improve business processes.
- Vodafone is a credible machine-to-machine (M2M) solution provider. The M2M opportunity helps supplement traditional wireless and wireline revenue streams. Vodafone supports more than 13.9 million active M2M connections worldwide as of end September 2013. One customer is BMW, which uses Vodafone's embedded SIM cards to enable BMW ConnectedDrive (e.g., navigation, battery charge level, traffic conditions, route topography). Vodafone is selectively expanding its M2M reach to address automotive, health, public sector, security, consumer goods and electronics, energy and utilities, transportation and logistics, and finance.