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After Spotify deal, Vodafone eyes video opportunity

After Spotify deal, Vodafone eyes video opportunity

Three-year strategic plan marks transition from 'turnaround' to 'growth', says CEO

Vodafone CEO Iñaki Berroeta

Vodafone CEO Iñaki Berroeta

Signing video and other content deals will play a big role in a three-year Vodafone strategy to grow the business, according to Vodafone CEO Iñaki Berroeta.

The fresh strategy gets going this year and will mark the start of a “new phase” following Vodafone’s turnaround initiative, which sought to restore customer trust after the company haemorrhaged customers in the wake of network problems in 2011, Berroeta told media on Monday.

“During the next three years, our ambition is to grow the business, in terms of customers and also financially,” he said.

“Our role in the market is to bring new things, to challenge established players and to give them more of a battle for our customers but also for the overall market. We will be innovating and enhancing the value-add that our customers get.”

Berroeta declined to give customer or other numbers ahead of next week’s financial results release from Hutchison Telecommunications, which owns half of the Vodafone Australia joint venture.

However, the CEO said Vodafone had met all its targets for 2014 and he was “extremely happy” with the way the company was performing. In addition, he said that Vodafone had increased its net promoter score (NPS), a measure of customer satisfaction, by 16 points over the last year.

Contributing to the company’s success has been content deals with Spotify and Fairfax, and Berroeta said that Vodafone would continue to sign content deals, with video in particular an important next step that will be announced “soon.”

“A lot of people are already using many of these content services on their own, but what we see is that when we are packaging these services inside our plan, the adoption is much greater,” the CEO said.

“What is important is that we are able to choose those partners that … bring in good value for our customers … We [don’t just] want to fill up with content, but what we really want is to get things that our customers will appreciate, and we will be working on that for the next year.”

The CEO agreed that any signing of new content will have to be balanced against likely increases in data usage per customer. More customers are increasing their data usage, he said.

However, Berroeta would not say whether Vodafone would increase its data limits in response. He noted that customers can today pay $10 to add an extra 1GB to their plan, if needed in any given month.

“I think that we have been able to reach a very reasonable way of pricing that extra usage.”

The CEO declined to answer a question about whether the company would offer unmetered data usage for specific services, a tactic that some fixed-line broadband providers have employed. Instead, he noted that there are key differences in fixed and mobile that would have to be considered.

Vodafone also plans network upgrades and new share plans for customers in 2015, said Berroeta.

In the first quarter of this year, Berroeta said Vodafone will increase its 4G speeds with the introduction of carrier aggregation on its network, a type of next-generation LTE that is already available from Telstra and Optus. Vodafone plans to roll out Voice over LTE (VoLTE), which is IP voice using the 4G network, later this year.

During the first half of this year, Vodafone will begin to offer shared family plans—including shared voice minutes, SMS and data, the CEO said. Optus allows sharing of data across multiple devices but not voice or SMS allocations.

Berroeta said he maintains an “open mind” on whether to offer fixed line services in Australia. Vodafone, the parent company, offers fixed line services in some other international markets, but for now in Australia the company is focussed on mobile, he said.

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

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