Vodafone To Increase Data

Word is that Vodafone, in its bid to win back some of the customers that it went to such heroic lengths to lose, is going to double the data allowance on some of its mobile plans. Will it help win back market share?

This will only be a temporary increase, most likely offered over the lucrative Christmas period. (It is ironic that telcos consider Christmas to be a busy period. In the business space the main telcos all but shut down from mid-December until the start of January.) For example, their popular $65 plan - ‘unlimited’ calls and 1.5Gb of data – will now provide 3Gb of data. It is a considerable increase, and more than is being provided by Telstra and Optus. More data is always valuable, especially now that all three major players have LTE networks.

However, there was a time when Vodafone differentiated their brand by offering the cheapest plans (not including the ultra-budget MVNOs), with the lowest access fees, largest data pools and biggest handset subsidies. They hit upon further savings measures in 2011 by having their services work in far fewer places; there’s nothing cheaper than a call that doesn’t connect. This had the happy result of decongesting their mobile network. If only more people had stuck around to see it. Since 2011 Vodafone has lost over 1.2 million customers.

Most of those flocked to Telstra – at the time going through a rare phase of competitive pricing - and Optus, who have always sat nearer Vodafone in popular perception. Consequently, a successful bid by Vodafone to lure back customers will affect the other two main telcos directly, with Optus likely affected the most.

Data allowance is an area where Optus is vulnerable. Optus’s new plans now provide less data than ever, although it has sought to offset this by providing cheap ‘automatic’ data packs. (They now gouge you for less, but do it more reliably and often, and market it as corporate responsibility. Dog and Bone’s review is here.) Vodafone offering much more data could well look appealing to Optus customers, who are typically keener to take advantage of a good deal than Telstra customers (who are clearly swayed by factors besides price).

The timing is also important. It is now about two years since Vodafone’s haemorrhage of customers hit full flow. Many of those customers would have signed two year contracts with their new telco, contracts that are now expiring. Many will be looking for new handsets, especially handsets capable of LTE speeds. Vodafone, whose ‘4G’ speeds periodically exceed even those of Telstra and Optus, might well look like a realistic alternative. It no longer provides great handset subsidies, but then no one does any more.

The issue will be perception. Vodafone, according to their ads, spent over a billion dollars upgrading their network to improve performance and coverage (quite aside from the considerable cost of the LTE upgrade), and returned their call centres to Australia. They even had that nice Samuel Johnson do the voiceovers. (If that doesn’t scream trustworthiness then nothing does.) Nonetheless, the perception persists – flourishes, even – that Vodafone’s network just doesn’t work. Can a few more gigabytes of data change that? Can anything?