Vodafone's sane start to broadband
The days when a mobile-phone network operator merely operated mobile-phone networks have passed. Now, any self-regarding company in the business needs to be a broadcaster, web-access point, content provider and lifestyle statement — and deliver broadband to the home to boot. With today's announcement of an 8Mbps £25/month service, Vodafone is finally doing the fashionable thing.
Yet while convergence remains the war-cry of the service providers, there's no sign that consumers could care less about the infamous triple- or quad-play of internet, phone, mobile and television if they tried. People want everything for nothing at no effort, and they don't much care if one or 100 companies are involved.
Vodafone's approach is one of the sanest and most cautious to date. By keeping the ticket price high and reselling BT's infrastructure, it will control demand, be able to offer high reliability and afford to spend money on customer services — all areas where its competitors have fallen down. And, when you crunch the numbers, the combination of inclusive line rental, service level and mobile call discount makes the offer more attractive than the headline figure suggests. It may not be able to trim its prices quite as lean as if it went straight to having its own infrastructure — via local loop unbundling — but the initial service should be better.
The question is whether sanity and good sense are driving the market. The UK has a budget mentality that means it would rather suffer than pay up front — an attribute that has done Ryanair proud over the years, and encourages discreet premiums such as Orange's 50p/minute support charge. Even if a substantial number of users is prepared for a higher per-month rate, they'll only find Vodafone's offer attractive if it can generate a perception of higher quality — and for a company that's recently come bottom of a consumer satisfaction poll, that's no trivial task.
We commend Vodafone for at least nominally adding quality and value to a market that has not been doing well for either, even if it's more an effort to keep its own customers than to plunder the competition. But it needs to do more than keep them; it needs to keep them happy. That's the only way the company can turn promise into presence.