Vodafone promises: Our 4G will be fastest

news Mobile carrier Vodafone today revealed it would launch its 4G network in June this year in Australia’s capital cities, promising the long-delayed network would deliver Australia’s fastest 4G speeds so far due to initial spectrum advantages over rivals Telstra and Optus, which have had 4G infrastructure available for a substantial period already.

Vodafone is the definite laggard in the 4G network. By the time the telco launches its 4G services in Australia, the nation’s largest telco Telstra will have had 4G services in some areas for almost two years after the telco first sent its 4G network live in September 2011, and Optus will have a year’s head start on Vodafone after it launched its own network in mid-2012. Telstra said this year that it already had some 1.5 million 4G customers, but Optus has not yet detailed its 4G figures.

However, in a press briefing in Sydney today and an associated media release, Vodafone Australia chief executive Bill Morrow told journalists the company’s network would likely be faster, due to an initial spectrum advantage which sees the company have access to some 20Mhz of spectrum in the 1800Mhz 4G band being used.

“We’ve picked up the pace and are sprinting to meet the current and future needs of our customers. We are proud to be able to deliver our customers Australia’s fastest 4G network in metro areas backed by a solid 3G+ experience,” said Morrow. in the company’s statement. The company has conducted local tests up to 80Mbps, and tests conducted by Gizmodo at the press event today typically averaged above 60Mbps, putting Vodafone’s 4G network theoretically similar to Optus’ network and faster than Telstra’s 4G network, which has typically ranged up to 40Mbps or so.

At the event today Morrow said the MIMO mobile standard would ultimately allow speeds up to 150Mbps, although those won’t be achievable at the network’s launch. However, despite the company’s potentially faster 4G speeds and the ongoing refurbishment of its network, there remains no doubt that Vodafone won’t be able to match anywhere near the coverage levels nationally which Telstra and Optus are vying for around the country with their 4G infrastructure.

“We’ll be kicking off with most of our coverage in Sydney and Perth, with some coverage in Melbourne, Adelaide, Brisbane, Gold Coast , Newcastle and Wollongong,” the company said in a separate blog post today.

The company will aim to have some 1,000 4G towers nationally by the end of 2013. However, Optus had some 500 towers by August last year, and was continually rolling out new sites across Australia. Telstra said in May that same year that it already had some 1,000 4G towers at that point and was looking to deploy another 1,000 by mid-2013. 4G coverage maps displayed to journalists today showed 4G coverage in major Sydney hubs such as the CBD and other centres, but patchy coverage in a number of other cities.

Morrow said in the press briefing that Vodafone was not going to attempt to provide an equivalent service nationally with telcos such as Telstra — and that it would not target customers in rural areas seeking 4G coverage, for example — with the company not being prepared to make that level of network capital investment at this point.

However, the company is also continually remediating its existing 3G infrastructure across Australia with the aim of providing 91 percent of the population with “great voice” and what it terms “3G+” data speeds by the end of 2013. Morrow said the company was aiming for download speeds of up to 8Mbps on 60 percent of Vodafone’s network. the company has spent a great deal of effort upgrading more than 3,000 in-building sites (for example on train networks, in shopping centres) and is also adding about 2,000 new site locations natinally.

The company is also taking other measures to win back its customers’ confidence following its ‘Vodafail’ series of outages several years ago — such as changing its charging structure to a per kilobyte basis and developing its Tasmanian call centre to ensure more Australian customers are able to speak to Australian call centre agents. It has also invested significantly in its backbone network to ensure it’s IP-enabled to improve customer experiences such as online streaming video.

Morrow said: “We have a long way to go but with our local call centre investment; our determination to eliminate bill shock for customers; and, now our 4G network launch, we are well on track. These are brave moves that in many ways are against where our competitors are focused, and they will help us earn back the hearts and minds of the Australian people. I am confident our unrelenting focus listening and acting on the voice of the customer will ensure we win.
 
“These initiatives – and many others – have been matched by lowering our cost structure to pass along value to our customers.  These include rigorous house-cleaning which started with changing two-thirds of the leadership team, nearly halving the number of non-customer facing staff and reducing operational expenditure such as high-profile sponsorships to direct investment to network and front-line services.”
 
“We’re not done yet,” said Morrow, “but our journey is well underway and we have our sights firmly on earning back the trust of our customers and restoring Vodafone to its place as one of Australia’s most admired brands.”

However, there are few signs so far that the actions Vodafone has taken over the past several years to reform its network and customer service capabilities are taking effect in customers’ minds. In February this year the company revealed it had lost 443,000 customers and about $817 million in the 2012 calendar year, as indications continue to mount that the company’s network rejuvenation, staff restructuring and executive leadership changes have had little to no impact on its financial fortunes as yet.

opinion/analysis
There was a lot that came out of today’s press briefing with Morrow; the executive spoke honestly and openly about the company’s ongoing troubles and the concrete steps which it is taking to conquer them. This article has primarily dealt with Vodafone’s imminent 4G launch, but I’m planning another article shortly on the mobile regulatory situation, with a mind to Morrow’s views and the current competitive landscape with respect to mobile, so stay tuned for that as well.

So what do I think about Vodafone’s current situation?

Honestly, the company is doing everything right at the moment under Morrow’s leadership. It’s investing in its networks strongly to get the basics up to speed and target high-profile areas with really fast 4G infrastructure; but it’s not over-investing in 4G right now, because it knows there is just no way for it to compete fully with Telstra and Optus in this space. It’s cutting costs, dramatically boosting customer service and investing in its backbone infrastructure to sure up the reliability of its network as a whole.

At the same time, Morrow is being extremely humble about the situation. The executive is very open about admitting what Vodafone has done wrong over the years to get itself into this situation, and he’s also not targeting every customer out there in areas where he knows his company can’t compete. Vodafone is letting some customers go right now, for now, while it shores up its situation, but Morrow is conscious that he’d like to win back many of those customers later.

All of these steps are precisely the right ones, and I applaud Morrow for taking the company in precisely the right direction. I feel like there are glimmers of interest out there amongst mobile customers in Vodafone again, and I feel the company’s momentum will grow slowly over the next year, as Morrow turns the ship around.

However, personally, right now I don’t feel like it will be enough to save Vodafone in the medium term (four to seven years).

Right now, courtesy of its huge and early investment in 3G and 4G infrastructure, Telstra is sucking all of the energy out of the mobile market like a giant black hole. Optus is growing in the market slowly, but Telstra is growing rapidly, and my bet is that most of those customers are coming directly from Vodafone. In this context, where even Optus is having trouble, Vodafone’s going to have even more trouble keeping existing customers and gaining new ones, and even the deep pockets of its international parents aren’t going to last forever when the company is losing hundreds of millions of dollars a year. Morrow’s on a clock to turn Vodafone around and show results, and he knows it. The executive may perhaps only have a couple of years before it becomes apparent whether his turnaround plan is actually going to be viable or not.

I’ll explore more with respect to this situation in the previously mentioned separate article on the emerging regulatory issue in the mobile sector. But for now, let’s sum up my view on Vodafone like this: For the sake of healthy competition in Australia’s mobile sector, the nation’s mobile customers really need Vodafone to succeed. Vodafone’s doing all the right things to push it in the direction of succeeding. But right now I feel like these efforts may have come too late. I want to believe, but I can’t just yet — I need to see evidence that the company’s customers have stopped deserting to the tune of hundreds of thousands per year.

Morrow image credit: Vodafone