Vodafone says it's 'right in the middle' of turnaround

Can Australia's number-three telco make a three-year recovery?

Vodafone CMO Kim Clarke says telco is making progress in turnaround effort.

Vodafone CMO Kim Clarke says telco is making progress in turnaround effort.

Vodafone is halfway through its three-year turnaround initiative, Vodafone's chief marketer Kim Clarke this week told the ADMA Forum in Sydney.

Vodafone has been trying to recover after losing more than 1 million customers to competitors Telstra and Optus since 2010. The number-three telco is still bleeding – in the six-month period ending 30 June, it lost more than 137,000 customers.

“In terms of the turnaround itself, we’re right in the middle of it,” Clarke said.

The normal lifecycle of mobile contracts has prevented a quicker turnaround, she said. Customers with contracts typically stay with a telco for 18 months before changing providers, she said. However, Vodafone has had some early success winning prepaid customers who don’t want to be locked into contracts, she claimed.

While Vodafone has projected a three-year turnaround, telecom analyst Chris Coughlan has predicted it might take five years for Vodafone to pull off a brand recovery.

“The issues were significant enough that a fair amount of time needs to pass before the market will consider moving back,” he told Computerworld Australia.

Clarke said she is tackling the problem with a three-step process of addressing the root cause, leveraging Vodafone’s strengths, and spearheading a change program across the business. The marketer previously outlined how she is repairing the brand in an interview with our sister site, CMO Australia.

An early part of Vodafone’s turnaround strategy was admitting past problems and promising to do better.

“It’s not a very human thing to do to push it away and keep walking,” Clarke said.

When Vodafone was suffering frequent network problems from 2010 to 2012, “one of the things that we probably didn’t do as well as what we could have is actually acknowledge a mistake that actually happened,” she said.

Action must follow admitting mistakes, she said. “While acknowledgement is nice, and you do expect it, if you don’t actually address what you’re acknowledging and do something about it, that’s even worse.”

Vodafone has been investing significantly in its 4G network and aims to cover 95 per cent of Australians who live in cities by the end of 2014.

The telco announced on Tuesday that it will reallocate 850MHz mobile spectrum to boost 4G network coverage for 1.5 million of its existing customers. The telco has just completed a trial of 4G-compatible devices using the spectrum across 40 sites in Newcastle, NSW.

Meanwhile, competitors Optus and Telstra have announced commercial pilots of 700MHz spectrum won in the Digital Dividend auction. The telcos were granted early access to commercial licenses to test the spectrum before 700MHz networks are switched on in January 2015.

Adam Bender covers telco and enterprise tech issues for Computerworld and is the author of dystopian sci-fi novels We, The Watched and Divided We Fall. Follow him on Twitter: @WatchAdam

Follow Computerworld Australia on Twitter: @ComputerworldAU, or take part in the Computerworld conversation on LinkedIn: Computerworld Australia

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