20060530

Voda results and a DVB-H Kartel

German MNOs definitely took their time to answer debitel's M-VNO - DMB combo*. Vodafone, E-Plus, O2 and T-Mobile unsurprisingly decided to push DVB-H, but their joint approach may prove counterproductive : it looks like clumsy lobbying from all 3G auction winners / losers (Telefonica included), with the benediction of the main lobbyist behind European UMTS then and DVB-H now (Nokia, a former Finnish timber company building forests for towercos). The message : we paid the price for your bad spectrum allocation management so this time let us do our job. We'll take care of everything and TV operators will enjoy an efficient one-stop-shopping system. Mobile TV belongs to us not to them, we need to recover some of our losses thank you.
Losses ? Voda painted their net loss of 21.9 billion pounds a rather T-Mobilish pink in a "Delivering against expectations" section where they "meet or exceed all financial guidance for FY05/06". Meet "financial guidance", the latest financial indicator... a sure hit after the 2000-2002 EBITDA wave, even if all analysts are not bound to dance on this one that easily.

Other remarks :
- over 5% of total revenues for the FY (10% for the last month) were generated by "3G devices", which means "3G" itself delivered much less than that.
- one year after the French NO (to the constitution as well as to the sale of SFR), Europe seems to have stalled. Spain looks fine but Voda warns the audience : fiercer competition in 2006 means weaker results ahead.
- messaging put aside, data jumped an impressive 60% but only represents 3% of controlled service revenue. Revenues can be "stimulated" but margin will improve much quicklier across the Red Empire through a much less glamour "disciplined execution".
- dividends are definitely following a positive curve but in such a context that sounds like a strategical dead-end
- The Verizon Wireless operation comes handy and I'm not sure it will be the case in the future. I see neither strategic vision nor long term commitment in the following statements : "Vodafone's board will always consider shareholder's value", "Vodafone is happy to remain in the US with its existing stake". Actually, I don't think shareholders are happy to remain with the existing lack of strategy.

Now moving on to the "Mobile Plus" revolution (which could be translated by "we cannot survive as mobile only but we cannot scream our loss of face so loudly so let's label fixed services as mobile extensions") : Vodafone At Home and Vodafone At Office were very much needed, and tapping into the advertising well makes perfect sense, but the company seems to define itself as a follower.


If I didn't expect Voda to turn into a daredevil overnight, a cultural shift demands at least some affirmation from a leader. Here, a "customer demand led" Vodafone cautiously dips a timid toe inside the fixed arena ("only the fixed services customers want") and doesn't even expose its own brand in the advertising field where it is so much relevant : to me, leveraging on Google only, a rival in location-based services, instead of developping the Vodafone brand is a strategic mistake.

Well... I've definitely not been very kind to Vodafone lately, but I'm holding no grudge against them. Only expressing some frustration considering what they could do. I felt the same about Orange a few years ago and I hope it won't take them as much time to deliver.

* see "CeBIT unnovations" (20060312)



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