Vodafone 3G launch disappoints
November 13, 2004
Vodafone finally became the second 3G operator in the UK this week
after more than one and a half-year behind 3UK.
Four years after successfully acquiring its 3G licence for £6 billion,
Vodafone has only 11 years left to make its money back from its
heavier than expected investment before the licence runs out. With
the gloomy 3G outlook some analysts even wonder will they actually
recoup their investment. But Vodafone CEO Arun Sarin has more confidence
with the technology, saying it's "payback time" for the investment.
The launch was accompanied with less excitement and glitz than
3UK's launch back in March 2003. It was more like business as usual
for Vodafone. Some employees did not even know 3G was launched in
their company. The company has not thrown its weight to back the
service.
Vodafone recruited B-list celebrities for its launched while 3UK
invited Thierry Henry from Arsenal to attend their launch. The UK
government backed 3UK's launch with the Trade Industry Minister
making video calls and giving interviews to broadcasters. There
was no show from the government this time for Vodafone. The launch
received less coverage from the world media and only limited terrestrial
news coverage in the UK.
Vodafone's price plans are not impressive and the complicated and
unclear price plans make it difficult for consumers to compare prices
with 3UK, but a quick comparison of tariffs suggest 3UK offer more
value for money.
3GNewsroom.com was inside a Vodafone shop during launch day and
could clearly see customers did not come out with 3G phones. Customers
were still more interested with 2G than 3G.
Consumers seem to be less interested with 3G, as the service from
3UK has made customers lose confidence with the technology. Users
associate 3G with unpredictable coverage and poor quality voice/video
calls. We already seen consumers whom already signed up to 3UK return
back to their 2G service.
Vodafone must somehow project to consumers its 3G service is better
and worth the extra costs. But with games download costing £5 each,
customers may find it difficult to justify its worth.
At the time of the licence auction, it was estimated that operators
must acquire an APRU target of £80 a month for them to recoup their
investments. Indications are that operators will find it difficult
to meet the £80 target because 3UK is only achieving £43 for its
ARPU.
3UK did bring a new lease of life to the UK mobile market with
excellent price plans that no other UK operators could match and
forced them to think about their costs. Now all eyes are on Vodafone
for the next few months to see if they can do better in their roll
out than 3UK.
A customer of Vodafone 3G whom used to be with 3UK told 3GNewsroom.com
there was virtually no differences between the two. There were drop
calls between handovers but customer service and the range of 3G
handsets on offer were better.
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