Mobile data strategy:
Our data revenue was up 26.4%(*) year-on-year to £5.1 billion and now represents 12.0% of Group service revenue. Network quality is central to our data strategy and based on third party tests performed in 16 of our main 3G markets, we rank first for overall data performance in 13 markets.
Mobile data: technology
We have collaborated with our main suppliers to pioneer the development of single RAN base station equipment which enables us to replace our existing 2G and 3G base stations with one solution which also supports LTE, providing significant savings in energy consumption and maintenance, and delivering improvements in capacity and coverage.
Mobile data: customer experience, pricing and connected devices
We are enhancing our customer care, retail presence and online service to ensure that customers get the best data experience. We are introducing data centric store formats and we now have 5,000 specialised data customer care representatives in Europe.
Focus on key areas of growth potential:
How the market is developing
The fastest growing sector of the global telecommunications market is mobile data. According to industry estimates, between 2010 and 2014 total global revenue from fixed voice will decline by US$70 billion, mobile voice will increase by US$24 billion, fixed data will increase by US$49 billion and mobile data will increase by US$138 billion (source: IDC Worldwide Black Book 2010).
Mobile data penetration of our customer base in Europe is around 37%, far higher than in developing countries such as India at around 18% which highlights the opportunities in emerging markets. Data usage growth on our networks has been significant, growing by around 69% across the Group over the last year compared with 25% for voice.
Mobile data demand is being accelerated by the wide range of sophisticated devices available including mobile broadband sticks, smartphones and tablets, greater network speeds and an increased range of applications.
Our objective is to deliver data faster, with the best experience and more profitably
To accelerate the opportunities of mobile data we are investing in:
- network technologies to deliver the best network experience;
- providing a better data experience to our customers through all our customer channels; and
- providing leading smart connected devices.
We already have a strong data position in Europe thanks to our significant 3G investment, with over 66,000 3G sites providing high speed mobile data and 65% of our 3G network providing theoretical downlink speeds faster than 14.4 Mbps. Some of our European targets are set out in the table below.
|At 31 March 2011||Target by 31 March 2013|
|Number of 3G sites||66,000||90,000|
|Percentage of 3G network at >14.4 Mbps||65%||100%|
We have also launched commercial initiatives to encourage mobile data use including:
- tiered pricing plans to give customers more control (see Mobile data-customer experience, pricing and connected devices: Pricing);
- re-designing customer experience and support systems to provide a better mobile data experience;
- a multiplicity of data-enabled devices such as smartphones, tablets, low-cost handsets and USB sticks; and
- managing smartphone and network yields to deliver profitable growth.
Typical achieved speeds in Vodafone's network
- Europe region plus Egypt and Vodacom.
Source: Vodafone commissioned third party drive-by tests on data user speeds (September 2010 - January 2011).
We always aim to deliver a market-leading customer experience and we use a third party to compare our networks with those of our major competitors. During the year we benchmarked our 16 main 3G markets. The results showed that we are the leading data services provider in 13 markets. On average across the networks measured we were almost 40% faster on data downlink than our best competitor and 40% faster on data uplink, a result achieved through our investment in extensive network upgrades and optimisation.
Investing to increase coverage
Continued site deployment
At 31 March 2011 we had over 66,000 3G sites in Europe, providing 83% 3G coverage across our major European markets. This represents an increase of over 8,500 sites during the year.
Vodafone 3G station
We have continued to introduce Vodafone 3G stations, also known as femtocells in our markets. These innovative devices deliver a personal 3G mobile phone signal to customers through a fixed line broadband connection, giving coverage to customers where mobile operators are unable to provide a strong enough signal. At 31 March 2011 Vodafone 3G stations were in service in seven of our markets serving almost 400,000 customers.
Investing to improve customer experience
High speed packet access (HSPA) upgrades
We have continued to upgrade our HSPA networks with 65% of our European 3G network equipped with 14.4 Mbps theoretical peak downlink speeds or above and 90% providing 7.2 Mbps or above theoretical downlink speeds. Peak download speeds of up to 43.2 Mbps (downlink) and 5.8 Mbps (uplink) are now supported in several key traffic areas. These figures are theoretical peak rates deliverable in ideal radio conditions with no customer contention for resources.
Long-term evolution (LTE)
During the year we commercially launched our 4G/LTE technology in Germany and Verizon Wireless launched in the US. 4G/LTE can offer better performance than our current 3G/HSPA technology while increasing network capacity.
High capacity backhaul upgrades
To support the high speed data capabilities introduced across our access networks we have upgraded our backhaul and backbone transmission networks, which connect our base stations together, to the latest high bandwidth IP technologies.
As part of a strategy to implement scalable and cost-effective self-build solutions we have deployed high capacity ethernet microwave technology and high bandwidth optical fibre transmission solutions. In Europe about 80% of our radio base stations are served by self-built transmission (where we have physically installed and own the infrastructure) and over 20% are currently connected using high capacity technologies.
New services and capabilities engineering
We have consolidated the national IP networks in all our major markets into a single IP network giving us the ability to deliver high quality IP connectivity to our customers.
Investing to improve cost efficiency
Yield management capability
We have been supporting the improvement of 3G data service quality by managing the operational effectiveness of our network capacity. This enables us to optimise content and services as well as manage our costs. We have improved 3G data service quality in this way in 18 markets.
To reduce the cost of mobile network infrastructure, we have continued to use network sharing agreements with other operators in all of our controlled markets, with 70% of the new radio sites throughout the Group being shared with other mobile network operators.
Single radio access network (RAN) and green technology
By 31 March 2011 we had installed over 9,000 of these new single RAN base stations. We are also working hard to reduce our carbon impact through the wide-scale adoption of leading edge green technology solutions. Across our markets we are equipping our radio sites with advanced carbon-efficient solutions such as wind, solar and fuel cell technologies.
Research and development (R&D)
Our R&D ambition is to pioneer innovative services and technology in order to connect anyone and any device to one another and to the internet. We have introduced six key programmes to achieve these ambitions: networks of the future; smart charging; mobile location analysis; consumer electronics; automotive; and M2M.
Our focus over the next year will be on data and smart communication. We are also launching an innovation centre in the US and have strengthened our patent portfolio through strategic patent filing activity in areas relevant to our business interests.Back to top
customer experience, pricing and connected devices
To accelerate the opportunities of mobile data we are investing in providing a better data experience to our customers through all channels. They interact with us through retail stores, online, through our call centres and by our mobile phones. We place great importance on multi-channel capabilities to make it convenient and easy for people to contact us. We have developed the online self service and sales function, and website visits have grown to approximately 133 million a month.
Most of our markets are able to propose individually relevant offers, specific to a particular customer based on their usage patterns, and we are seeing as many as 50% of customers accepting them when offered. We are enhancing our billing and customer management platforms to make it easier for people to have several Vodafone SIMs, subscriptions and bundles, using different devices. We are also developing a single view of all our customers which will allow multiple services used by a customer to be managed and presented on a single bill.
To better understand our customers satisfaction, we started to use net promoter score (NPS) this year to measure to what extent customers would recommend us to others. We are in a NPS leadership position in either consumer or enterprise in over 60% of our markets. We are also implementing programmes in all our controlled markets to get direct feedback from customers to help us improve service.
We have introduced tiered data pricing to give customers more control over their mobile data spend and therefore encourage mobile data use. Customers are charged for the amount of data they use rather than a flat fee for a high level or unlimited use. The benefits include providing smaller and less expensive allowances for people who do not use much data and better cost management for higher users as well as optimising the capacity of the data network.
This year we launched a market leading smartphone roaming data plan that allows our European customers to use their home data plan abroad for only 2 a day to access the internet, emails and applications, making data roaming easier and more affordable.
Smart connected devices
Our handset portfolio is key to our strategy as it helps differentiate us from the competition, acquire customers and increase data usage.
Smartphones and tablets
We aim to have the most attractive portfolio in the market. Smartphones now account for 19% of the total number of phones used by our customers in Europe and this is expected to grow strongly. We are also driving down the cost of smartphones in order to make the data experience available for lower income segments in both European and emerging markets. Examples of this are the Android-powered Vodafone 845 and 945 devices launched during the year.
We also aim to lead the tablet segment, which is growing rapidly. We were the first operator to launch an Android Honeycomb tablet with the Samsung Galaxy Tab 10.1v and we have started to distribute the Apple iPad 2.
Vodafone branded handsets
We have developed a broad range of Vodafone branded handsets focused on mobile internet experience and design differentiation. The Android-powered Vodafone 845 and 945 are competitively driving mobile internet further into the prepaid segment. The Vodafone 553 accelerated the widespread use of qwerty devices and related messaging and social network trends. Additionally, devices such as the Vodafone 543 powered with Opera Mini, enhance mobile internet browsing experiences even on low bandwidth connections.
During the year we introduced the Vodafone K4605 USB stick which provides theoretical peak data download speeds of 42.2 Mbps using 3G/HSDPA technology and a 4G/LTE USB stick which has the potential for faster download speeds. We also launched Vodafone WebBox and Vodafone TV services.
Smartphone yield management
Evidence from our main markets shows that smartphones are driving incremental ARPU uplift and longer customer life times relative to non-smartphones.
Across our markets we are working to optimise the smartphone migration path by carefully managing how we allocate acquisition and retention subsidies, managing our smartphone portfolio, and maximising data attachment on smartphones and the penetration of integrated tariffs. As data penetration and usage amongst existing customers grows, we are introducing tiered data allowances.