Vodafone will not launch a TV service in the UK until its fixed-broadband offering is “successful”, according to CEO Nick Read.
Speaking to analysts after Vodafone unveiled its quarterly figures, Read said that Vodafone UK CEO Nick Jeffery had made “the right decision” in focusing on a broadband offering without TV for the time being.
“When we’re successful and we know the [fixed broadband product] and have great service, then I want to overlay TV,” said Read, adding that this would be based on Vodafone’s company wide cloud-based OTT TV platform – a strategy explained by fixed development chief Nuno Sanches at a conference in London last week.
Read said the decision to hold back on TV in the UK was “brave” but that it was a “good example for Vodafone moving forwards” because the company should focus on “doing a few things really well”.
On the rollout of Vodafone’s fixed offering in the UK, Read said that the company was “happy with the engagement we have” with fibre network outfit CityFibre, which is building a network in major UK population centres that it will sell access to on a wholesale basis, with Vodafone as anchor customer.
Read said that Vodafone also had a “contingent” agreement with BT that “doesn’t compromise…our commitment with CityFibre” and which could be cancelled without a significant penalty, in what was possibly a reference to BT Openreach’s wholesale offer for ISPs.
Last year, Vodafone was reportedly in talks with BT Openreach about a possible joint investment in fibre. However, Read told analysts that Vodafone was “not engaging with them at the moment in terms of any further opportunity”.
Turning to Spain, where Vodafone has lost a large number of TV and broadband customers over the last six months as a result of its decision not to strike a deal for football rights with Telefónica, Read said that customers losses were “broadly in line with expectations”. He said that Vodafone was now looking to compete “head-to-head” with Orange on price, something that it had shied away from in the past. He said that Vodafone had also introduced a “mid-tier” offering that was designed to take on low-cost providers like 02 and Jazztel.
Read said that the sharp decline in EBITDA in Spain recorded over the last six months was “unacceptable” and that the company needed to implement a restructuring of its cost-base, which would be done over the next six months, with an update promised in May.
Read declined to comment on the German competition watchdog, the Bundeskartellamt’s request to the European Commission to refer the German portion of Vodafone’s planned acquisition of Liberty Global assets in Germany and central Europe back to it beyond repeating Liberty CEO Mike Fries’ comment that the move was “expected” and “no surprise”.
He said the deal involved two businesses with “multi-country, non-competing, overlapping footprints” and that precedent existed to suggest that the deal should be approved.
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