news National mobile carrier Vodafone has confirmed it is declining to sell the iPhone 5 handset which launched last week to new customers, with the carrier turning away those not already on Vodafone plans, in favour of prioritising getting the hyped Apple device to its existing customer base first.
The policy first surfaced online late last week after a number of would-be Vodafone iPhone 5 customers were turned away from the carrier’s retail outlets – with some offered Samsung’s rival Galaxy S III handset instead. “I’m sorry but we are not signing up any new customers on the iPhone plans,” one Vodafone retail representative said in response to an attempt by a MacTalk forum poster, ‘Steve_D’. “It’s company policy.”
Over the weekend, a Vodafone spokesperson confirmed the situation, saying: “Given the limited stock and the popularity of the device, we are prioritising existing customer requests,New customers are encouraged to enter their details on our registration site and we’ll contact them when our preorders are fulfilled.
It is common for stocks of new iPhones to run low when the devices are first released on an annual basis, with Apple typically only receiving a limited allocation of the devices for sale in each country it serves. Wait times on the company’s own website for Australian delivery has already been pushed out, as Apple took more than two million pre-orders for the iPhone 5 in just 24 hours last week. However, it does not appear as if Telstra and Optus are restricting sales of the iPhone 5 to the same degree as Vodafone is.
The news comes as it also appears as though there has been lesser levels of demand for the iPhone 5 from Vodafone than from competing carriers Telstra and Optus, with a number of posters online highlighting the fact that the retail stores of Telstra, Optus and Apple itself saw a much greater amount of traffic on Friday morning when the iPhone 5 launched in Australia, compared with Vodafone’s outlets.
“Vodafone Neutral Bay was empty this morning at 9am. No people walking in and no phones going out,” wrote one poster on MacTalk last week. “It was like that at Broadway too. Big queue at the Telstra store, about four people at Optus, nobody at Vodafone,” wrote another.
Part of the issue for Vodafone may be that the iPhone 5 supports 4G speeds which its network does not – but that both Telstra and Optus are able to offer in some areas of Australia.
On July 31, the nation’s number two telco Optus revealed it had upgraded some 500 of its mobile towers across Australia to support 4G speeds (the telco’s 4G towers will now do up to 60Mbps). The telco has already launched commercial 4G services to business customers in Sydney, Perth, Newcastle and Melbourne.
Shortly after that launch, Telstra — which had heretofore been the only telco to have launched 4G services locally — returned fire, announcing that it had some 500,000 4G customers following its own launch in May 2011 and would be expanding its 4G network to two-thirds of Australia’s population by mid-2013, with an additional 1,000 4G towers to be deployed to make a total of 2,000.
In comparison, Vodafone only recently announced that it had upgraded its network to support the DC-HSPA standard which both Telstra and Optus already supported, and is not planning to deploy 4G infrastructure until 2013, radically limiting the speeds at which owners of the iPhone 5 and other 4G handsets such as the Samsung Galaxy S III and HTC One XL are able to connect to the Internet online.
You can understand the decision by Vodafone not to sell the iPhone 5 to new customers. The company has seen its prepaid customer base rapidly eroded over the past several years through its so-called ‘Vodafail’ episode, but it hasn’t lost as many post-paid customers (although it hasn’t gained any either). With the launch of the iPhone 5, Vodafone’s first task will be to ensure that its sizable basis of iPhone customers don’t desert it for rival carriers with 4G infrastructure.
However, there is a more troubling fact here for the company. As I predicted a few weeks back, Australian consumers aren’t stupid, and they have obviously noted the fact that Vodafone doesn’t have a 4G network at the moment to use their new iPhone 5 on. With this in mind, I’m sure many Vodafone customers who wanted an iPhone 5 last week switched quickly to Telstra or Optus. And I’m sure both telcos were quite aware of this and weren’t turning new customers away. At the time I wrote:
“The launch of a 4G iPhone in Australia will only accelerate that ongoing slow disaster for Vodafone. How many iPhone 3G, 3GS, 4 and 4S customers does Vodafone currently have? Surely a great deal. And surely many of these customers will very quickly switch to Telstra or Optus when they buy a new iPhone with 4G speeds.
That trend will only accelerate if Apple itself openly uses its marketing clout to blanket the nation with advertisements proclaiming its new iPhone is capable of “4G’ speeds in Australia; as it surely will do. Every launch of an iPhone comes with a substantial new feature which Apple wants to push, which Apple then spends substantial efforts to educate the local population about. And there is every reason to suspect that 4G speeds may be one of the key new benefits to arrive with its latest smartphone opus, a fact every media outlet in existence will trumpet to the world.
I believe industry analysts and commentators will be watching very closely to see how well Vodafone survives the launch of a 4G iPhone in Australia. Because personally, I suspect such a launch has the potential to force the company to stumble even further to its knees than it already is. How low can Vodafone go? No doubt Telstra and Optus are even now planning to force Vodafone’s face into the dirt by the end of this year.”
Are we seeing the beginning of the end for Vodafone? Well, not quite yet, but the hints are accumulating. Its prepaid customer base is deserting it gradually, and now it seems as if its iPhone customer base is also strongly at risk. Just how much the iPhone 5 launch will affect Vodafone is hard to tell at this point; I guess we’ll have to wait for the next financial results release to find out.