We are focused on deepening customer engagement through convergence, by providing ‘one more product’ to our customers.
Through our Gigabit networks we believe we can build a digital society that helps improve people’s lives. We are committed to investing in our network infrastructure and coverage to deliver a high-quality service that allows individuals and businesses to connect confidently anywhere and at any time. By connecting over 350 million people to our Gigabit networks by 2025 we want to support our customers, both individuals and businesses, to realise these benefits.
We aim to drive growth in the Europe Consumer segment by developing deeper customer relationships, with a strong focus on our existing base. We intend to do this by: cross-selling more products (e.g. broadband, family SIMs, TV), up-selling new experiences (such as tiered offers based on quality of service and/or higher speeds), low latency mobile gaming services, and a wide range of consumer IoT devices.
The benefits of high-speed connectivity
We have Europe’s largest NGN footprint – providing us with a significant platform for growth
The demand for NGN broadband (i.e. via fibre or cable) in Europe is growing rapidly. Over the next five years, the number of households with NGN services is expected to increase by more than 40 million as consumers migrate from legacy DSL to gigabit-capable technologies. This equates to over 120 million NGN households by 2024.
Having created Europe’s largest NGN footprint, this shift towards NGN represents a significant window of opportunity for Vodafone to capture substantial and profitable market share gains. We are capitalising on this opportunity, adding 719,000 broadband customers, including 1.5 million NGN customers, this year taking our total European broadband customer base to 18.8 million (including VodafoneZiggo).
With the potential to offer superior gigabit speeds via DOCSIS 3.1 on cable and via FTTH to most of these homes in the next few years, we see significant scope to increase our on-net broadband customer penetration, which is currently 28%.
Driving convergence and lowering churn
By gaining scale in fixed, we further deepen our relationship with customers through upselling converged offers and additional services.
Our commercial momentum in convergence has accelerated this year having added 1.1 million customers. In total, we now have 6.6 million converged consumer customers in Europe.
Convergence contributed to a record low mobile contract churn rate in Europe of 15.5%. The opportunity to grow our converged base remains significant with only 40% of our consumer broadband base in Europe currently taking both fixed and mobile products from Vodafone.
5G brings further opportunities
We intend to launch 5G services in line with leading local competitors during calendar 2019 and 2020, with an initial focus on dense urban areas. While the immediate benefit from 5G is the ability to significantly lower the cost per gigabyte on our network, there are also a number of potential revenue opportunities in the consumer segment. These include Quality of Service (‘QoS’) differentiation and opportunities for low latency mobile gaming, with an estimated 157 million users forecast by 2025, fixed wireless access (in select rural/semi-rural areas), and a range of potential consumer IoT devices and applications that will be supported by our ‘V by Vodafone’ global platform.
Europe’s leading TV and content distribution platform
We have one of Europe’s leading TV and content platforms with 22 million active users. Over time, by having one fully integrated, scaled TV and content platform across our European markets we will become an attractive partner of choice for content providers, who by agreeing commercial terms at a Group level gain the ability to distribute their content easily via one platform across our markets.
Our content strategy is to be an aggregator and distributor of content, working closely with national and international partners, rather than an owner or creator of unique content which requires a different skill set and focus. This was reflected in our decision earlier this year not to renew football rights in Spain, as it was uneconomic to do so and the potential to grow our football customer base was limited.