It's been a mixed week for Vodafone, what with plans to cut jobs in Germany and renewed interest from Verizon Communications over the sale of the UK-based group's 45 per cent stake in Verizon Wireless.
The group also this week made a major announcement on Vodafone Red, the group's answer to the growing threat of over-the-top providers and its overarching strategy for the future survival of Vodafone. Vodafone Red has already been rolled out in several markets, but the operator has now announced that the "Vodafone Red customer proposition" will be expanded to 14 European markets, "together with the addition of new and compelling customer options."
Vodafone said Vodafone Red is the group's "largest multi-country marketing campaign for five years," but on closer inspection it appears to be little more than a renewed statement of intent. Indeed, much of the "new and compelling customer options" have already been rolled out in some markets, and are certainly available from other operators.
The wider question remains: is Vodafone doing enough to remain competitive in an increasingly hard-fought mobile market, and will it be able to combat the OTT challenge?
The key elements of the Vodafone Red proposition are unlimited calls and text messages--which the operator hopes will prevent users from making use of web-based communications apps for chatting and messaging--along with "very generous data allowances" and "world-class cloud and online protection services to back up and secure personal data".
Current Analysis analyst Emma Mohr-McClune spends a lot of her time analysing operator efforts to increase value within their service offerings. "There's nothing here that is new," was her assessment of the latest Vodafone announcement, and she said sees little true innovation in the Red plans.
For example, unlimited calls and text messages are already widely available from many operators, and "generous mobile data allowances" are becoming increasingly common, with operators now providing inclusive bundles of 3-5 GB and more in some European markets.
Mohr-McClune also said she doesn't believe it can be assumed that consumers only use OTT apps because they are cheap and so will be easily swayed by unlimited text messages and calls. Some will prefer WhatsApp and similar services because they are cool and trendy apps that fit in with their lifestyles, she noted.
What's more, Vodafone and other operators in Europe already include cloud back-up services as part of their smartphone plans, and data multi-SIM plans that allow data to be shared between a smartphone and a tablet are also widely available.
Indeed Mohr-McClune does not think Vodafone is going far enough with data-sharing propositions, certainly if it wants to replicate US .m.odels that allow large data buckets to be shared among several devices, and, crucially, among several family members.
"Family plans are big in the U.S., but not so much in Europe," she said. Vodafone Red does mention family plans, but these are not for sharing data and instead offer discounts on plans for family members.
Rather than being a hugely innovative proposition, Vodafone Red appears to be more of a defensive strategy to hold back the OTT tide until Joyn--mobile operators' answer to OTT--is fully rolled out.
Is it too little, too late? "The horse has bolted" when it comes to OTT, said Mohr-McClune, also adding: "Joyn is around two years too late."
On the bright side, mobile operators do have a fundamental advantage: they have the opportunity to transition from being utility service providers to trusted service providers with a strong focus on security and protection of customer data. Mohr-McClune noted that data security is certainly an element that operators have been careful to stress as a key benefit of Joyn.
Some operators have taken a more proactive stance by jumping on the OTT bandwagon and launching their own apps, such as Orange's Libon and Telefónica's TU Me. Both of these operators also say they are committed to Joyn, however.
Over the coming months we'll continue to monitor the OTT challenge, as well as operator responses to what continues to be a hugely disruptive force in the market.--Anne