Vodafone Spain Continues on IMS Warpath with Three New Fixed/Mobile Bundles for SMEs

| Dec 3, 2008 | Business Telecom Services - Europe | Competitive Intelligence Report

| Analyst: Joel Stradling

Current Perspective: Positive
Vendor Importance: Moderate
Market Impact: High

Event Summary

December 2, 2008 – Vodafone Spain launches three FMC bundles for SMEs. ‘Todo en Uno’ allows end-users to preserve existing fixed-line numbers and can forward calls to the fixed office line to mobile handsets. The second offer is a mobile-only solution costing EUR 20 per month for up to 5 hours of calls to either fixed or wireless numbers. Finally, ‘Officina Vodafone’, is a total communications package with DSL access and network-based PABX functions with calls directed over an IP VPN.

Analytical Summary

• Current Perspective: Positive on Vodafone Spain’s three new SME offerings for fixed-mobile convergence, because the carrier has developed a set of business propositions that will appeal to this segment and are aggressive on price compared with the incumbent offerings. Vodafone Spain is aiming for differentiation by emphasising the mobile aspect, and yet offers to maintain the client’s fixed phone number and support call- rerouting to a mobile device.

• Vendor Importance: Moderate to Vodafone Spain because the operator needs to leverage its mobile network asset and market momentum, plus activities in DSL-based fixed broadband, to bring new and compelling FMC offerings to market. This represents the natural evolution of the carrier’s SME market strategy, ongoing advancements with deploying the Ericsson IMS platform in Spain and LLU efforts.

• Market Impact: High on the Spanish SME market, because Vodafone Spain is offering aggressive pricing and applying pressure to competitors by leveraging both its strong mobile business and NGN platform to offer convergence. The company’s initiatives cause disruption with mobile substitution a distinct possibility with at least one of the offers (mobile-only), and at the same time the carrier is forcing competitors to reevaluate their SME bundle pricing and feature-sets to remain competitive.

Current Perspective

Competitive Positives and Concerns

Recommended Vendor Actions

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Recommended Competitor Actions

• Competitors in Spain need to reassess their portfolios and make sure offerings are watertight in terms of price versus feature-set. Carriers strictly involved in the fixed line camp should concentrate on compelling fixed line bundles, in other words broadband access and cost-effective ISDN or VoIP telephony, and consider MVNO plans for adding the mobile element.

• Combined fixed and wireless operators such as Telefonica need to face the prospect of mobile substitution head-on by empowering Moviles with an attractive range of wireless office proposals. Customers should be presented with competitive mobile telephony offerings, and receive sales message concerning the advantages of preserving a fixed line for converged voice, data and video. Fixed line access technology continues to outperform 3G broadband, especially in cases where ADSL 2+, VDSL and/or FTTB are concerned.

• Systems integrators and telecom operators aiming at the upper end of the SME segment should inform customers of the advantages of using a proven network and ICT expert for fully managed applications and IT outsourcing. For example, T-Systems, COLT and BT Spain have far stronger credentials in corporate data network solutions compared with Vodafone Spain.

Recommended End User / Customer Actions

• Spanish SME customers should evaluate Vodafone Spain’s offers, looking closely at charges and comparing these with existing communications bills. The compelling aspects of the company’s offer include a range of options covering flat-rate fixed/mobile convergence, a mobile-only solution, and a total communications offer including DSL access and IP VPN for on-net calls and network cloud-based PABX functions.

• Vodafone Spain has a compelling price list for its SME communications bundles, with a focus on aggressively-priced mobile phone services and the possibility to maintain an established fixed line office phone number with calls routed from the same to a mobile handset.

• Customers looking for services extending beyond basic fixed and mobile telephony should be aware that Vodafone Spain has VoIP and Unified Communications on its roadmap, but does not currently enter such areas in any depth. Such SME prospects can consider COLT, Telefonica and BT Spain for more comprehensive fully managed network and IT services, including for example comprehensive data security, as such players have dedicated focuses on the needs of the business segment, and more mature internal IT consulting and support.

CLIENTS ONLY

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