Vodafone can't seem to get enough of the U.S. market--the company is going to dive back into the market next year by becoming an MVNO of T-Mobile US (NYSE:TMUS).
Vodafone Group's Vodafone Americas unit said that service is scheduled to launch in the late fall of 2015. The offering, which does not yet have a name or pricing, is being positioned as a tool for enterprises looking to have wireless service in the U.S.
In January, Vodafone shareholders approved the company's sale of its 45 percent stake in Verizon Wireless (NYSE: VZ) to Verizon Communications in a $130 billion deal. Vodafone has since been concentrating on its core European markets, especially by buying wireline assets to launch quad-play service offerings.
However, Vodafone said it wants to cater to its more than 400 multinational customers based in the United States and a further 500 Vodafone multinational customers that are based outside the United States but have a "strong U.S. presence."
The addition of wireless will complement Vodafone's existing portfolio of U.S. and international fixed, mobile and M2M products and services, the carrier said. Vodafone will also deploy its Vodafone OneNet global converged communications solution across its U.S. multinational customer base.
Vodafone has been a historical rival with T-Mobile parent Deutsche Telekom, and in the U.S. it competed indirectly against T-Mobile thanks to its stake in Verizon Wireless. However, Vodafone appears to be setting aside that rivalry to get a foothold back in the U.S. market.
As RCR Wireless notes, former DT executive and T-Mobile USA CEO Philipp Humm resigned from T-Mobile in June 2012 to join Vodafone in October 2012 as chief executive of the carrier's Northern and Central Europe business. In the fall of 2013, Vodafone merged its Northern and Central Europe and Southern Europe regions into one Europe region under Humm.
556 Ventures analyst (and FierceWireless contributor) William Ho wrote in a blog post that both Vodafone and T-Mobile will benefit from the deal. For T-Mobile, the partnership is a way to get more subscribers on its network and compete in the enterprise market, which has been largely dominated by AT&T Mobility and (NYSE: T) Verizon. The deal also strengthens T-Mobile's wholesale and M2M business.
"For Vodafone, the U.S.-based mobile offering provides the operator to enable service bundling opportunities, including low cost mobile roaming across its 27-country footprint," he wrote. "The T-Mobile agreement should be more than an overall U.S. play as Vodafone Americas include Canada and Latin America. The company will push this as part of Vodafone's OneNet solution which touts fixed-wireless solutions. The solution bundles include the usual enterprise operator offerings such as cloud services, M2M, telecom expense management, security and access to a global IP-VPN network."
However, Ho noted, it's unclear how many total wholesale subscribers 400 multinational customers can bring. That might not matter since wholesale customers are cheaper to acquire than retail ones, Ho noted.
"So given Vodafone's long history with Verizon Wireless, it does seem to be a slap in the face," Ho added. "After all, the 400 target customer accounts are all U.S.-based and the potential for the other 500 potential accounts have a strong U.S. presence, which means some could be existing Verizon Wireless clients. But then like many multinational enterprises, deals with multiple vendors provides choice and negotiating leverage which means T-Mobile/Vodafone Americas may not have exclusive deals."
Vodafone's deal with T-Mobile will likely look even better by the end of 2015 when T-Mobile is expected to finish its LTE buildout of 300 million POPs. Indeed, Ho noted that it's also "telling that Vodafone did not cut the MVNO deal with AT&T since AT&T's current LTE U.S. footprint is larger overall. But if T-Mobile's wholesale business unit follows its retail unit, being the low-cost value provider could be the swaying element on top of its expanding national LTE network message, one with a goal that meets 300M POPs by end of year 2015."
- see this Vodafone statement
- see this RCR Wireless article
- see this 556 Ventures post
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