Vodafone Hutchison Australia chief marketing officer Kim Clarke has detailed her plan to use network reliability, adequate internet speeds and “the biggest corporate turnaround in Australian history” to take on Telstra and SingTel-Optus.
In an interview with The Australian Financial Review Ms Clarke said Vodafone was not interested in starting a price war to win customers – even after the critical year of 2015 when Telstra and Optus are handed a significant network advantage.
But it is understood the company is set to temporarily double the amount of mobile data it offers customers on a range of plans to entice people to sign up during the peak Christmas season. This means a $65-per-month plan will come with 3 gigabytes of data included.
In May, Telstra and Optus spent almost $2 billion on 700 megahertz spectrum, a radio frequency previously used by analogue TV that is excellent for transmitting signals over long distances and into buildings.
However, Ms Clarke said her customers would not initially need more than 50 megabits per second as long as the network was reliable.
“Spectrum is not going to be an issue for us [because] the key thing for me and what customers will look for is speed, coverage and reliability,” she said.
“With the agreements we’ve got in place [with Optus] hopefully coverage will be off the table and reliability will still play a big part.
“Once you’re hitting speeds of 50Mbps, [reliability becomes key]. I’m not saying expectations won’t rise as consumption does .?.?. but the main app at the moment is streaming radio and music.?.?. and I think we’re in a good spot for that.”
Smartphone discounts to dry up
Ms Clarke also said she would use drastic cuts in the price of Vodafone mobile plans or smartphones such as the Apple iPhone to entice customers to join the network.
“In terms of combating the 700MHz spectrum strategy, it’s not about lower prices. Our key focus will be proposition development in terms of reliability,” she said.
“You might be paying the same price point but for the same $60 I’ll give you infinite voice and text and 50 per cent more data than Telstra and Optus.
“Absolutely, [falling handset subsidies are good] because it lowers our cost in terms of the service we provide customers. We want to make sure if you can commit to us for a 24-month period, [then] I will take the risk and subsidise the price of the handset at a lower cost than Telstra.”
JPMorgan analyst Paul Brunker said Australian mobile carriers were no longer willing to give customers large discounts on smartphones to entice users onto their networks.
“If you have a problem with network quality and perception then increasing your prices is a big call to make,” he said.
“Vodafone seems to be saying they have enough of a value proposition [and] if we fix it they will come. And I think that’s right but it’s not all that benign because the share will have to shift from somewhere else. Optus will suffer more than Telstra from a Vodafone comeback because they’re closer in terms of customer perception.”
Ms Clarke acknowledged it would be hard to turn the company’s reputation around and make it a viable business.
Vodafone Australia has lost over 1.2 million customers since early 2011 when its network suffered a meltdown and it has signalled further losses will come when its financial results are released on November 12.
“We’ve got a business to rebuild and you’ve got to be in on it boots and all,” she said. “When staff come to work here I tell them, ‘You’re about to become part of the biggest corporate turnaround in Australia. Do you want that on your curriculum vitae? Then come on in
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