Vodafone overhauls offers to revive growth

VODAFONE’S UK arm is preparing a major revamp of its offers in a bid to kick-start growth after a chaotic IT overhaul battered its customer service record and sent its share of the market sliding.

It is understood that the operator will introduce a new range of packages tailored to specific customer groups, beginning with an offer targeting students in the coming weeks. Vodafone will aim to win back and attract new subscribers with more generous data allowances and improved customer services. The offers are likely to make some services exempt from data allowances, an increasingly common mobile industry tactic known as “zero rating”.

Vodafone will seek to capitalise on its relatively large share of the mobile airwaves, which allows for higher capacity on its network. It recently renegotiated its network sharing deal with O2 to gain more independence to upgrade its network.

After students, Vodafone is expected to tailor packages for small businesses and families. The moves by Nick Jeffery, the Vodafone UK chief executive, have been given the go ahead after Vittorio Colao, the chief executive of the group, declared the domestic business “in recovery” after its IT systems were stabilised and call centre operations brought back to the UK.

The company’s first-quarter results revealed a 2.7pc decline in UK service revenue to £1.6bn, a bigger than expected improvement on the prior three months, when it was down 4.8pc.

Overall group revenues were down 3.3pc, to €11.5bn (£10.3bn), while reported group service revenues, the key measure of network sales, fell by 4.6pc. Vodafone reported growth in service revenue in all European markets other than the UK.

The group continues to face difficulty in India, however. It has been battered there by a price war triggered by the entry into the mobile market of Mukesh Ambani, the sub-continent’s richest man. Service revenues were down 13.9pc, which the company has blamed on “continued price competition”.

However, Vodafone now says the situation is starting to stabilise.