Friday, November 18, 2005

Fri - Telecom leaders apologise to shareholders

Both the CEO's of mobile giant Vodafone and leading French operator France Telecom have publically apologised to their investors. Both of their share prices continued to tank.

Both CEO's have had to face the ultimate humility and agree that they had perhaps not comunicated bad news in the best possible way. I'm not entirely sure how you communicate bad news nicely, but bear with me.

The real reason that they're aplogising is because their businesses are stalling a little. Vodafone is finding competition across Europe intense and the price of switching customers over to 3G expensive. Plus their Japanese business remains perenially in the toilet. France Telecom is struggling with similar issues bar of course the Japanese part. France Telecom has the added pain of being an incumbent fixed line operator and we all know how painful that is.

Plus, their is one other piece I feel. I think everyone underestimated the success of 3. 3 is kicking rear end after all. They have a great brand, they are seen as cool and innovative and they were the first to grab early mover 3G customers. 3 now have over 10M customers worldwide and growing. And their data services revenues are impressive.

Vodafone and Orange have not yet really seen that much of a hike in ARPU. But they will. It will just take a little longer and cost them more than they thought.

So, why are they apologising? Because it's all the rage right now to bend over for investors - just look at VNU etc. If I was Mr Sarun I would worry less about aplogies and more about how to get Vodafone quickly and successfully through the 3G wave, how to fight off growing global and regional competition, and how to face the new challenges of Wi-Fi and MVNO's. Oh, I'm sorry, I'm sure you are worrying about that. Silly me. At least I'm apologising as well. It must be catching.

Oh, and could you do more with Vodafone Live? It's a bit limp isn't it? Or maybe that's just me.

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