Network staying put in Australia: Vodafone

Vodafone Australia has confirmed that plans to sell off the remnants of its network are simply not on the cards and that it is "strongly committed" to Australia.

However, sources within Vodafone say a "tender" for the operational aspects of the network has already been submitted, although at this time no details of a call for tenders could be confirmed.

In a draft document, obtained by Computerworld which outlines the company's revised business plan for 2001, listed under the title of "Strategy Three: We will make some gutsy calls about what we will do and what won't do", is a project: "engineering outsource management/sale of some infrastructure".

The listed "total expected benefits" associated with this project included "regional benefits" in "network structures" yielding CapEx savings of $100 million per year and up to $1 billion cash for the "sale/partnering of networks". The document added that these changes would help the company to "focus … on our core business of customer relationships & solutions rather than managing 'dumb' network elements".

As reported by Computerworld on Friday November 9, the telco is preparing to slash its workforce by half, outsource its IT and engineering departments and sell off several projects as part of a drastic "turnaround" rescue plan.

In the draft document prepared on November 2 2001, chief operating officer Graheme Maher for Vodafone Australia, said the business is "now extremely inefficient".

"To give an indication of the size of this problem, the costs of our business have to reduce in both OpEx and CapEx by at least 50 per cent. In comparison to other businesses of the same or similar size, we would appear to need to reduce staff levels by 50 per cent, as well," the document said.

The spokesperson said a strategy to lease the network from a third party was "not a goal of the business".

Crown Castle Australia currently owns and maintains Vodafone's mobile base stations. The assets were sold to the company in late December 2000 in a deal worth $240 million.

Vodafone currently directs and controls all operational and performance aspects of its network.

Hardest to be hit by the next round of job cuts appears to the IT and engineering divisions.

Staffwise, sources say IT and engineering would account for close to half of the telco's employee numbers, and could be outsourced "pretty quickly".

In fact, the source believes the outsourcing of these divisions will be completed by the end of November.

Within the engineering division, the source said the team was currently working on a "couple hundred projects" which will be reduced to about 40.

The document points to an operational saving from the outsourcing of IT to be about $8 million.

As at September 2001, Vodafone Australia had 2219 permanent staff. In recent months it has announced 350 redundancies nationally, mostly in customer care.

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