VODAFONE

MARKET STUDY

Alina BLAGA
March, 2013

TABLE OF CONTENT
PART 1 VODAFONE vs. COMPETITORS

Vodafone Group Plc. overview

Vodafone Romania overview
Main market overview
Trends in telecom in 2013
Case Study: Romanian telecom players
Case Study: Brand Awareness
Case Study: Online Presence Awareness
Case Study: Advertising Investments
Summary for telecom players

PART 2 VODAFONE 4G MARKETING PLAN

4G market overview
Vodafone 4G S.W.O.T. analyse
Vodafone 4G target

PART 1
VODAFONE
vs.
COMPETITORS

Vodafone Group Plc. overview

Vodafone Group Plc. is a British company, with headquarters in London,

UK.
Vodafone is one of the worlds largest mobile companies providing a
wide range of services, including voice, messaging, data and fixed
broadband.
The Groups operations were previously split into two geographic
regions: Europe and Africa, Middle East and Asia Pacific (AMAP).
From 1 August 2012, the Groups operations are now split into three
geographic regions: Northern and Central Europe, Southern Europe
and AMAP.
Vodafone Group has around 238,000 base station sites and over
14,000 Vodafone Stores around the world

Vodafone Romania overview

Vodafone Romania launched the first national GSM network in 15 April

1997, through Connex, after 135 days after the licence has been
approved.

Vodafone Romania has made a significant contribution to business growth

through major investment nationwide mainly oriented towards:
expanding coverage 3G and 4G networks,
launch new products and communication services,
network expansion stores in the whole country,
social programs to support the community.

Source: Vodafone Company presentation 2012

Main Market overview

The Romanian Telecom market contains a number of major international

players, such as: Vodafone, Orange, Cosmote in the mobile sector, as well
as UPC in the wireline sector.

Both the fixed and dedicated mobile broadband market have continued to

grow in 2012, showing that total broadband subscriptions increased 11.6% in

2012.
The broadband market has
seen a sharp slowdown in
growth, falling from 19.1%
growth in 2011 to 9.7% growth in
2012.

Main Market overview

Main Market overview

As the traditional mobile market has been hit by recession and market
saturation, operators are turning to wireless data as their strategic focus.

Both market leader Orange

and Vodafone announced
upgrades to wireless data
infrastructure.
In July 2012, Vodafone
upgraded
mobile
internet
speeds for its highest tariffs to
43.2/5.76
Mbps
in
the
Bucharest region, Constanta
and Mamaia.
Vodafone also expanded its
HSPA+ coverage to 30 cities,
enabling speeds of up to 21.6
Mbps.

In June 2012, Orange increased 3G coverage from 55% to 98%.

This increase in coverage cost the firm $137.6mn and included upgrading 2,000
stations from 2G to 3G.

Trends in Telecom in 2013

2013 a year of momentum for 4G
The operators that have already launched their LTE networks in
Romania, Orange and Vodafone, have so far chosen relatively
different strategies.
While both cover Bucharest, Vodafone has chosen to introduce 4G to
9 other cities such as Arad, Bacau, Brasov, Cluj, Constanta, Craiova,
Iasi, Galati and Timisoara. Orange, on the other hand, has chosen to
focus on mountain resorts in the Prahova Valley, Bran-Moieciu and
Poiana Brasov regions.
Orange announced that it had introduced 4G mobile internet on the
iPad and iPad mini tablets.
Vodafone provides 4G on the Asus Transformer Pad Infinity TF700 KL
tablet, USB modules and hotspots.

Source: vodafone.ro

Trends in Telecom in 2013

The smartphone drives data forward
With global shipments of smartphones at more than 1 billion units in
2013, the smartphone audience will be very heterogeneous.
In Romania, the volume of smartphone sales as part of total mobile phone
sales will at least double in the coming year, predicts Ahmed Hassan,
managing partner, Deloitte Romania.
Higher web consumption comes with greater mobility
The number of mobile broadband internet connections reached 6.9m in
the first half of 2012, up 63.8% compared to end-2011 and nearly double the
figure in the same period in 2011.
Mobile advertising splits on two fronts
Deloitte splits mobile advertising into smartphone and tablet advertising, the
former generating USD 4.9 billion in revenues globally, and the latter
slightly less, USD 3.4 billion.
Orange representatives predict that in 2013, as last year, SMS messages
will continue to make up the greatest weight in mobile advertising in
Romania.

Case Study: Romanian Telecom players

2012 Results Comparison
Vodafone

Orange

Cosmote

Revenues of EUR 233 million in H3 2012,

which is 4% lower compared to H3 2011

Revenues of EUR 30.2m in H3 2012,

0.3% increase compared to H3 2011

Increased number of customers to a

total of 8.12m (59% were prepaid
customers).

Increased number of customers 10,24m

customers, having attracted 40,000 more
compared to its previous quarter.

6.3m customers, a 3.3% decrease

compared with previous year

Mobile ARPU (Average Revenue per

User) reached EUR 7.0 in 2012,
slightly below as 2011

ARPU (Average Revenue per User) reached

EUR 79 in 2012

ARPU (Average Revenue Per User),

reached EUR 5.3 increasing 1.5% in
2012

33% Market Share / 70% Market

Share on Corporate Segment

42.5% Market Share

24.5% Market Share

3G has national coverage

3G has national coverage

3G has a 73% of national coverage.

7% increase in 3G customer base

Service Revenues of EUR 177m in H3

2012, 14% lower compared to H3 2011

Case Study: Romanian Telecom players

2013 Tariff Plans Comparison
Tariff Plans over 30 EUR
Orange

Vodafone

Cosmote

Contract Name

Pantera 39

Mega 45

Cosmote No Limit

Costs

39

45

31

National Minutes

300 + international
to fixed numbers

450 (minutes or
SMS)

No limit

National SMS

300

450 (minutes or
SMS)

On-net Minutes

3000

2000 (minutes or
SMS)

No limit

On-net SMS

3000

2000 (minutes or
SMS)

No limit

Internet traffic

No limit / 2 GB at
3G

500 MB

500 MB

Others

Unlimited mobile
acces to orange
web

unlimited MMS + video calls in the same

network, Romtelecom calls and
international calls to Zone 1

Case Study: Romanian Telecom players

2013 Tariff Plans Comparison
Tariff Plans between 20 - 30 EUR
Orange

Vodafone

Cosmote

Contract Name

Pantera 23

Mega 25

Cosmote XXL+

Costs

23

25

24.8

National Minutes

200 + international
to fixed numbers

250 (minutes or
SMS)

250

National SMS

200

250 (minutes or
SMS)

On-net Minutes

2000

1500 (minutes or
SMS)

2000

On-net SMS

2000

1500 (minutes or
SMS)

2000

Internet traffic

No limit / 1 GB at
3G

500 MB

500 MB

Others

Unlimited mobile
acces to orange
web

2000 minutes in Romtelecom, 2000 on-net

video calls, 250 on-net MMS

Case Study: Romanian Telecom players

2013 Tariff Plans Comparison
Tariff Plans between 10 - 20 EUR
Orange

Vodafone

Cosmote

Contract Name

Cangur 15

Mega National 15

Cosmote L+

Costs

15

15

15

National Minutes

150, or international
to fixed numbers

700 (minutes or
SMS)

160

National SMS

No limit

700 (minutes or
SMS)

On-net Minutes

1500

1500

On-net SMS

1500

1500

Internet traffic

350 MB

200 MB

300 MB

Others

Free acces FB and

Yahoo!

1500 minutes in Romtelecom, 1000 on-net

video calls, 100 on-net MMS

Case Study: Romanian Telecom players

2013 Tariff Plans Comparison
Tariff Plans between 5 - 10 EUR
Orange

Vodafone

Cosmote

Contract Name

Delfin 7

Mega National 7

Cosmote S Data +

Costs

8.80

National Minutes

60 and international
to fixed numbers

250 (minutes or
SMS)

100

National SMS

No limit

250 (minutes or
SMS)

On-net Minutes

600

800

On-net SMS

800

Internet traffic

75 MB

100 MB

Others

800 minutes in Romtelecom, 200 on-net

video calls, 20 on-net MMS

Case Study: Brand Awareness

Source: gemiusAdHoc, March, 2013

Case Study: Online Presence Awareness

Source: gemiusAdHoc, March, 2013

Case Study: Advertising Investments

Structure of Telecom Companies that invested in Advertising in 2012
Consumated
Volume Amount

% of
Consumated
Volume

Orange

28,841,678

6.60%

Vodafone

16,175,302

3.70%

Cosmote

<300,000

< 0.78%

Client

Source: BRAT Report, 2013

In terms of Advertising, Vodafone has the second place in Telecom Segment

In terms of Brand Awareness, Vodafone is the leader, meaning that Vodafone has
a better approach in it's campaigns
In terms of online presence, Orange is the leader, meaning that the company
invests more in this segment

Summary for Telecom Players

From customer perspective, Vodafone should provide more competitive

contract plans in order to attract more clients.
For tariff plans, Vodafone is not competitive in terms of offer vs. costs,
the only leverage is that the customer can use their units as they
please: minutes or SMS.
In terms of internet traffic offered, Vodafone is not competitive as well,
and it should increase their internet traffic offer to beat the competition .
Romanian telecom market could have a stable trend this year, based on
growing mobile internet use.
3G services will see a rapid growth after 4G has been launched,
generating a decrease in terms of costs for 3G services.
Because Vodafone has a good coverage of 3G services in Romania,
this can be a leverage that can be use against competitors.
Smartphones segment has a growing trend, increasing 50% in H3 2012
vs. H3 2011.
Internet is the new era in telecom and this segment is the answer for an
increase of provided services and Vodafone should provide a better
internet experience for his customers.

Summary for Telecom Players

4G will allow telecom operators to provide better data transfer services and
Vodafone has the possibility to invest more and look-up for this segment.
In order to be able to provide a better 4G experience, Vodafone should offer
more smartphones compatible with 4G and to provide this service at a large
scale.

In terms of Brand Awareness, Vodafone is the leader for telecom

segment, which means that from customers perspective their brand is
more solid and present in all media sources.
In terms of online presence, Orange is the leader, Vodafone being the
second choice in customers opinion.
Romanian market is one of the most competitive markets in Europe and
the focus of Vodafone should be in the business segment, for
companies over 50 employees.

PART 2
VODAFONE

MARKETING PLAN

4G Market Overview

4G is the technology of the future, which offers superior quality to

multimedia services on the mobile phone, tablets and PCs.
Vodafone Romania launched limited 4G services on November 20, 2012
in 10 cities: Arad, Bacau, Brasov, Bucharest, Cluj, Constanta, Craiova,
Iasi, Galati and Timisoara.
Connection speeds are up to 75Mbps were possible and 4G geographic
coverage in the cities serviced is around 90%.
Coverage in Bucharest is much lower and it could be very limited in
Bucharest.
Vodafones 4G network runs in the 1800 MHz frequency bandwidth and
Romania was among the first European markets where the company
rolled out 4G services, after Germany, Portugal and Italy.
The Turbo 4G packages, Internet Nelimitat Turbo 75 and Internet Nelimitat
Turbo 100, are designed for accessing the internet on the laptop or tablet.
Clients who wish to acquire 4G services will receive a 4G ready SIM card
and can purchase one of the compatible devices in the companys
portfolio.
The 4G services can be tested in 17 Vodafone stores.
Vodafone offers USB Vodafone K5005 LTE modem, for PC/Laptop
connectivity

4G Market Overview
The 4G speed in the Orange network can reach 75 Mbps for download and
37.5 Mbps for upload.
4G mobile internet from Orange is available in Bucharest in the central and
northern part, in the metropolitan area in north Bucharest, in holiday resorts
on Prahova valley, in the Bran-Moieciu and Poiana Brasov regions.
4G will be available on modems and tablets and will also be introduced
soon on smartphones.
To connect to the 4G network, Orange offers its clients the modem Huawei
E392 4G and Samsung Galaxy Note 10.1 4G tablet.
By the end of April 2013, Cosmote will launch LTE in several cities in
Romania, including Bucharest, on a case-to-case basis.
For setting up the LTE network, Cosmote is working with equipment
suppliers Ericsson and ZTE.

Vodafone 4G S.W.O.T. analyse

STRENGHT POINT

WEAK POINTS

First company that introduces 4G in

Romania

Vodafone faces a tough competition in the

domestic market from Orange and potentialy
Cosmote

The award for the most stable online

connectivity from smartphones, given
by p3 communication audit

Low national coverage, only in the big

cities and very low coverage in Bucharest

Better mobile internet services speed

for 4G/LTE, up to 100Mbps compared to
75Mbps from Orange
Better 4G coverage compared with
Orange

OPPORTUNITIES

THREATS

Latest emerging technologies and

Higher data rates

Inability to meet consumer needs on the

basis of service quality and price ratio

Opportunity for development of the

new services and products that would
align with 4G

Difficulty of Compatibility between 4G and

devices

4G to be able also for smartphones

in 2013

New mobile market entrants and future

strategic partnerships

Vodafone 4G target
1. Business Segment
C.E.Os, managers and executives in need for high speed traffic data, video
streaming HD, video-confference HD with video call is the best target to
approach
The only disadvantage is that this segment is in continuos move and they
need 4G at a high level coverage
As a back-up, the package offered to this segment should contain 4G
speed where possible and 3G speed where 4G is not available
The package has to be very attractive in terms of costs, with compatible
offered devices
Based on the fact that Vodafone has a 70% market share on Business
Segment, and the fact that business-men needs to have the latest
technologies in order to develop their business, this segment can transition
very quickly to 4G.

Vodafone 4G target
1. Consumer Segment
Existing customers and new customers in need for high speed traffic data,
online games players, aps and songs download at high speed
The only disadvantage is that for this segment the actual tariffs are very
high and they will be forced to stick to the 3G, which will have a decrease in
terms of cost
In order to attract this segment, the package offered has to be very
attractive: at a contract for a minimum 2 years, at a 20-25 EUR/month, the
customer will receive a laptop/tablet + a USB modem with 4G speed. This
kind of offer will be very attractive for this segment, which will increase the
popularity of 4G, attracting also new customers.