news Mobile telco Vodafone has confirmed it is still planning to eventually offer fixed broadband services over the National Broadband Network’s infrastructure, despite the fact that its trial over the NBN died a quiet death several years ago.
Historically, Vodafone has focused purely on mobile services in Australia, although it does provided fixed broadband services in a number of the other markets it operates in globally.
This has left the company as an unusual player in a market in which all of the major telcos — Telstra, Optus and TPG — offer both fixed and mobile telecommunications services, often in bundles that give customers discounts for taking up multiple services from the same telco. For example, customers may purchase mobile phone services, as well as fixed broadband and even subscription television access, all from Telstra.
Vodafone has long stated it was interested in getting involved in the fixed market through the National Broadband Network, which offers the telco a way to sit on an even playing field with the likes of Telstra and Optus through using the same NBN infrastructure, avoiding the need for Vodafone to deploy its own infrastructure as the other telcos have.
This interest eventuated in Vodafone signing an agreement with the NBN company in mid-2011 to conduct a trial over the NBN network.
That trial kicked off in December 2011, with the company confirming at that stage that it had signed up the first batch of customers using Vodafone services over the NBN. At that stage, customers were also to get access to the FetchTV Internet platform.
“We are pleased to have connected our first NBN customers and delighted to be providing them with some of the innovation that’s possible with the latest generation of mobile, fixed broadband and TV services,” said Nigel Dews, CEO of Vodafone at the time.
Since that time, the NBN network has rapidly expanded, currently reaching about a million premises. Companies such as Telstra, Optus and TPG (especially through its NBN brand) have rapidly signed up customers on the network and are frenetically competing for new business. However, Vodafone has not yet launched any services on the new infrastructure.
Speaking with Delimiter this morning, Vodafone chief executive Iñaki Berroeta — whose tenure at the company has come after its previous NBN trial had finished — revealed Vodafone was still planning to engage with the NBN.
“This is part of our roadmap,” the executive said. “This is definitely an area that we are going to be looking into.”
The executive noted that one of the benefits of the NBN was that it would allow more companies to compete in the broadband market, including companies like Vodafone, and that as the network ramped up and more premises came on board, increasing the size of the addressable market, Vodafone would look to engage with the platform.
Berroeta said at the moment Vodafone was concentrating on its mobile business, which he said had “transformed significantly over the last year”. The company has largely recovered from its #Vodafail issues, which saw a significant amount of customers leave it, principally for the better-performing network of Telstra, but is still trying to make up lost ground.
“When the time is right, we will enter that market,” the Vodafone chief executive said with respect to the NBN.
Key to Vodafone’s engagement, Berroeta said, was that the company was able to “offer something additional” to customers and not just mimic existing services other companies were already offering. The executive also agreed with the fact that not all past efforts by mobile telcos to enter the fixed broadband arena had proven successful.
I can understand why Vodafone has not engaged with the NBN yet. It has had more than its fair share of work just keeping up with Telstra and Optus on the mobile front. The company is not yet fully recovered from its Vodafail exercise. Given the fact that there is strong competition over NBN customers already, I am sure Berroeta feels diving into the NBN world too soon could be a costly venture for Vodafone that could ultimately end in failure.
However, I also think the company has waited a little too long to engage.
Right now, there are north of a million premises in Australia which are already connected to the NBN’s fixed broadband infrastructure. And the rollout of the NBN offers telcos a unique opportunity to steal customers from rivals. Many, perhaps most Australians will see the rollout of the NBN to their premises as a chance to re-evaluate their current broadband provider and plan and potentially migrate to a different provider.
This will especially be the case when it comes to customers on the HFC cable networks which the NBN company is acquiring from Telstra and Optus. Up until the point where those networks are converted to the NBN, those customers have had zero choice of broadband provider. Suddenly they will have a great deal of chocie, and this represents a chance for other providers to steal those customers from Telstra and Optus.
Vodafone is in a unique position in this dynamic. It already provides many of these same customers with mobile services. It should be a very easy extension for the company to do a little cross-matching in its database and contact at least its own existing mobile customers as the NBN rolls out in their area, offering them bundling discounts for taking up a Vodafone-branded NBN service as a complement to their existing mobile service.
What’s more … Vodafone is a massive and well-known brand in Australia, certainly more well-known that a number of NBN players such as TPG or Dodo. Vodafone should be able to capitalise on this brand in an NBN world.
The fact that it has not yet done so reveals just how panicked Vodafone is about its mobile infrastructure — it is trying very hard to shore up its fortunes there. It is probably throwing all of its available resources at that area of its business.
But if it leaves this situation as it is for another couple of years, this may leave Vodafone in a very bad position when it comes to the NBN. Australian broadband customers typically sign multi-year contracts when they buy broadband services. Vodafone may enter the NBN market only to find that much of its natural customer base is already locked down by its rivals.
Image credit: Vodafone[/MM_Access_Decision]