Go.com

[dejgaard]

"Golden Future" says Vodaphone

http://www.jp.dk/erhverv/artikel:aid=2159918/

The 3G platform will revolutionize our use of mobile communication over the next 5-10 years, states Arun Sarin - the new boss of British Vodaphone.


London:

Arun Sarin, the new boss of the british mobile giant Vodaphone, sees a golden future ahead of him, in which all of us - powered by superfast broad connections - will use our mobile phones much more than today.

While the telecom industry as a whole, elbows its way out of 3 years dramatic crises, its the gain of more and more connected minutes from cable phones that occupies the Vodaphone boss more than anything else.

While some in the sector hesitates, Arun Sarin is fully confident that the expensively bought 3G technology as a platform will revolutionize the use of mobile communication over the next 5-10 years.

With a broad spectrum of multimedia services - delivered on a new generation of mobile phones with a speed we know from our broadband connections - we will soon be convinced to spend more money at companies like Vodaphone, Sarin predicted last week at a meeting with the foreign press union.

He still considers the market for mobile communication as underdeveloped. There's 1.3 billion mobile customers in the world - about the same number as of cable phones - but mobile phones take only on fifth of the total speaking minutes and that's not enough, according to Arun Sarin.

That said, he states, we should not forget that the mobile business has come a long way in relatively few years.

3G in waiting position

The whole telecommunications sector has grown explosively - global revenue is estimated at $ 1.4 trillion, this year - and the mobile share of that market increases year after year.

But challenges for the mobile companies in the coming year will be to convince customers to use their mobile phones for more than verbal communication, as it is in data traffic the potential for revenue is the largest.

Vodaphones ambition is that 20% of the companies service revenue is to come from data transmission such as mail messages and pictures. Today, this share is 15.5%.

The last couple of years crises in the telecom market is a collusion of several factors. From the dotcom bubble collapse and the generally falling stockmarkets to the astronomical investments that the tele-companies have made in fixed and mobile networks, based on expectations for demand that were unsupported.

The result has been a long line of bancrupcies, drastically worsened results and rapid decline in stock prices on a broad scale.

Tele-companies are estimated to have used $150 billion just to buy the needed licences to be allowed to run the new 3G networks. But the new platform has not developed as fast and as comprehensively as previously expected.

Arun Sarin estimates that it will be a gradual shift from 2G to 3G, rather than a "Big Bang", but he says Vodaphone still commits itself 100% to the new platform.

The company itself has postponed its grand marketing of 3G until next autumn. According to Arun Sarin, Vodaphone will unveil a giant marketing campaign for its 3G services in September/October 2004.

"We will not advertise our 3G services until we are sure the technology is in place and the new phones are ready. It is all about giving our customers all the right reasons to shift to 3G, rather than dragging them into it" says Sarin.



125 mio. customers

Vodaphone has, so far, invested $8 billion in 3G technology, apart from the billions spent on the necessary licences. It is now Sarins job to convert that into a success.

At the same time, he must ensure the continued rationalization of Vodaphone and make sure Vodaphone is placed most favorably towards the high growth end of the market.

The company, however, has already come far under Sarin's predecessor, Sir Christopher Gent, who through fusions and takeovers in the late 1990ies made Vodaphone the worlds largest mobile phone company - one of the worlds largest companies in general - with 125 million customers and a yearly revenue of $40 billion and ownerships distributing to 26 countries.

21 year old Vodaphone fused in 1999 with American Airtouch and combined their activities in the USA in 2000 with Bell Atlantic in the new company Verizon, which today is is America's largest mobile operator. Same year, Vodaphone was almost doubled in size through the takeover of German Mannesman.

Consolidation is not necessarily over for Vodaphone. Sarin does not hide his wish to take full control over Verizon in the US and SFR, the French mobile company, owned together with Vivendi. In both cases, Vodaphones minority position is of 44%

Sarin was applauded when he, a couple of weeks ago, presented his first full results as boss, announced an increase in net gain and issued a plan to initiate share buy-back for more than $4 billion.

In Sarin's first result - the half-year ending at the end of September, revenue had increased by 13% and net gain before tax by 26% to 5.4 billion pound. In the meantime, the company gained 5.7 million new customers.

Those, invested in Vodaphone will now be hoping that Sarin has set a precedence for the results he, at the helm, will present in the future.