Vodafone 2013 Annual Report Download - page 27

Vodafone Red
Vodafone Red offers consumers and
businesses a simple and worry-free package
with generous mobile data allowances,
unlimited calls and texts, plus cloud and
back-up services to secure personal data
(seeVodafone Red story above).
Vodafone Red has been launched in
14markets including Germany, Italy, the UK
and Spain. Early take-up has been positive with
4.1 million customers within eight months of
launch2. We intend to extend it to all European
markets within the next few months.
Future proong revenues
Our Vodafone Red plans are designed to
protect our revenues by providing unlimited
voice and text services, rather than limited
bundles or pay per event. Vodafone Red is
the latest step in our journey over the last
few years to migrate our customers onto
integrated price plans that combine voice,
SMS and data together in one single plan
rather than buying these services separately.
Including Vodafone Red customers, wenow
have 48% of our consumer contract
customers in Europe on integrated price
plans. These plans deliver value to our
customers, reduce the need for customers
to use IP-based substitutes and provide more
stablerevenue streams.
Driving data usage
Although our data revenue is growing
strongly in Europe the amount of data
consumed by each smartphone customer
is on average around 250 megabytes per
month, only around a quarter of the level seen
in the US.We see a signicant opportunity
to drivemore revenue from data services and
see the Vodafone Red proposition delivering
this by offering generous data allowances
to encourage customers to use more data
andover time purchase larger allowances.
Providing customers with
devices in a cost-effective way
At Vodafone we are a major source of our
customers’ smartphones, having subsidised
for many years the initial cost to access our
network. During the year we spent some
£5 billion or about 16% of our revenue
in Europe on acquiring new, and retaining
existing customers. In addition smartphone
penetration in Europe increased to 36%,
up from 27% in the prior year, and the mix
of smartphones continued to move towards
more expensive high-tier devices. Against this
background and to protect our protability
we need to maintain discipline on the handset
subsidies we pay.
Our Vodafone Red proposition is designed
to control handset subsidy costs by helping
customers more clearly identify the difference
between the price to access our services
and the price of the handset. We achieve this
by setting a base price for Vodafone Red plans
that does not include a handset (SIM-only),
charging a slightly higher service fee for
a basicsmartphone and more above that for
a high-tier smartphone.
Notes:
1 At 12 May 2013.
2 Vodafone internal estimates.
Vodafone Red
Our Vodafone Red proposition offers consumers and businesses a simple and worry-free package, with
generousmobile data allowances, unlimited calls and text messages, plus cloud and online services to secure
and back-up personal data, all included as standard. Vodafone Red packages also incorporate a number of
innovative services including:
a multi device plans, enabling customers to connect
a smartphone and tablet under one Vodafone Red
plan, making it simple and cost effective to own and
manage multiple devices under a single bill;
a family plans, allowing individual family members
to sign up to Vodafone Red at a discounted price;
a a much wider range of device choices, giving
customers the freedom to have a new device
included in the cost of their contract, receive
a discount by choosing a ‘nearly new’ smartphone
or choose to receive a new device every year for
a small extra fee;
a the option to connect to new, ultra-fast 4G services
where available;
a safe and secure solutions, including world-class
cloud and back-up services plus device insurance,
giving customers peace of mind in the event of theft
or damage; and
a industry leading roaming plans for customers
travelling in Europe, so that they can use their phone
abroad as they do at home, for an additional daily
price similar to the cost of a cup of coffee.
36%
of customers in Europe have
a smartphone, up from 27% a year ago.
>70%
of smartphones users are expected
to use video services by 2015 (compared
to around a third today)2.
US$27bn
At US$27 billion our brand is rated as one
of the most valuable telecoms brands
in the world.
Vodafone Cloud
Vodafone Cloud allows customers to safely store
theirpersonal digital content such as contacts,
photos and videos in the Vodafone network and
to access it on the move from any connected
device. Vodafone Cloud was launched last year in
multiple markets and works across the most popular
smartphones, tablets and PCs, forming part of the
Vodafone Red proposition.
25 Vodafone Group Plc
Annual Report 2013
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