Vodafone sees 20%-25% of revenue from data by 2004
By Anne Young, Total Telecom
08 March 2001
U.K.-based mobile operator Vodafone Group plc said Wednesday it expects between 20% and 25% of its total revenue to come from data services by 2004, up from around 7% today.
Speaking at a presentation of the company's strategy for the rollout of next-generation mobile services, group chief executive Chris Gent claimed the company was fully on track with its 2.5G and third-generation rollout plans. GPRS services, providing faster speeds and, more importantly, always-on connectivity, are scheduled for commercial deployment in 11 countries by the second quarter of this year. 3G services are expected to follow in most markets in 2002, said Gent.
Gent also stressed that while GPRS infrastructure is now in place, the buildout of 3G infrastructure, a far more costly undertaking, would initially be concentrated on urban areas. GPRS will continue to be used in less dense areas.
"GPRS is there, and 3G will be concentrated on areas where there is a requirement for high-density services," said Gent. "But we will not hold back on 3G rollout."
GPRS takes the pressure off 3G, added Gent, and is an important building block for 3G as it launches mobile carriers and their customers into the packet world. Gent also claimed that GPRS handsets will be less expensive than was originally thought, starting at around 150 euros and coming down to around 100 euros towards the end of this year, while the technology's capabilities will be wider than was originally envisaged.
"It's a good learning period," said Gent, who believes GPRS has a four- to five-year window of opportunity.
The number of GPRS handsets will be relatively few at commercial launch, but Gent said around 30 models would be on the market in the second half of 2001. Dual-mode handsets, allowing both 2.5G and 3G access, would be critical, he added.
According to Fritz Joussen, head of new products and service implementation, the biggest jump ahead in the handset field will be the introduction of Java-capable phones, which will allow applications to be changed without changing the phone itself.
Vodafone now has around 173 million mobile subscribers worldwide, and plans to step up its efforts to build a consistent brand name across all its markets, as well as provide seamless services across a global Internet platform.
The objective, said Gent, is to provide a global brand for the customers, establishing a single Vodafone brand in each country in 2002. The ultimate goal is to create the most valuable global brand by 2004.
"But it will be important to get the balance right between local and global," said Joussen.
Voice will remain the most important application, Gent added, and it has been well-documented that increased data use actually increases the number of voice calls made. By 2004 voice is still expected to account for 75% to 80% of Vodafone's overall revenue, while revenue from data in 2004 is expected to be broken down as follows:
8% to 13% from messaging;
2%-3% from m-commerce;
5%-10% from information and entertainment services
8%-13% from business services;
2%-3% from device-to-device communications.
Personalization of services will be critical for all operators, as they seek to differentiate their offerings and keep churn down.
"Getting the personal layer right is a key strategy for us," said Joussen.
Content creation, such as through Vodafone's Vizzavi mobile portal - a joint venture with Vivendi Universal - will form an important part of the operator's strategy to deliver value to its customers, and will help to create additional network traffic, said Evan Newmark, chief executive of Vizzavi.
"We will address the whole value chain," said Thomas Geitner, chief executive, group products and services, "from devices, services, content delivery platforms, through to CRM and billing integration and personalized services." |
