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Vodafone PAYG Returns to Growth After 10 Years

Vodafone UK's PAYG returns to growth for the first time in a decade

By CBR Staff Writer

The last time that Vodafone reported revenue growth for its Pay As You Go (PAYG) mobile business, Gordon Brown was Prime Minister and Slumdog Millionaire was winning awards; it was, in short, a small lifetime ago.

This morning Vodafone UK touted the return to growth of PAYG as among the highlights of a standout quarter, with new mobile contract customers doubling quarter-on-quarter in the three months ended September 2019.

Vodafone attracted 500,000 new customers (a quarterly record), the company said: 371,000 PAYG; 106,000 mobile contract; 61,000 home broadband, with the PAYG rise the first return to revenue for the segment since 2009.

Company Continues to Trim Costs, Using RPA and Chatbots 

The news came as first half financial results showed group revenue increasing by 0.4 percent to €21.9 billion in H1. The company is midway through an aggressive digitalisation campaign designed to trim costs.

The British multinational continues to target a net reduction in operating expenses (opex) in Europe of at least €1.2 billion by 2021, compared to 2018. It is on track to deliver opex reductions of  €0.4 billion this year, it said.

As part of these efforts, Vodafone has now deployed its TOBi chatbots in 14 markets, the company said in its earnings report. These handled 14 million conversations across the group in September, representing an impressive 19 percent of customer contacts.

Vodafone is also planning to reduce its store footprint by 15 percent to cut its €800 million annual retail activities cost, it added.

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Vodafone UK CEO Nick Jeffery said: “We have come out of the blocks quickly in the first six months of this year and have many more great customer products and services planned for the second half of our financial year.”

OpenReach Deal

The news came the day after the company inked an agreement with BT subsidiary OpenReach that will allow it tap to OpenReach infrastructure to help it roll out full fibre services. That deal comes – as the FT reports –  after OpenReach said that it would offer discounts to the broadband service providers that use its network if they commit to heavy marketing campaigns at the local level and to connect large blocks of customers to faster fibre services. (OpenReach is under significant political pressure to speed up capex-intensive full-fibre build-out.)

Vodafone PAYG Growth

The PAYG growth is in part due to successful performance by VOXI, the youth brand from Vodafone, which added 92,000 new users in the quarter.

The news caps a hectic quarter for the mobile network operator, which now has 5G in 58 cities across the UK, recently secured a reciprocal wholesale deal with Virgin Media to provide their mobile customers with new services, including 5G, and to provide Vodafone with mobile backhaul and corporate fixed connectivity.

Vodafone now has more than one million customers using its new mobile and broadband offers, the company said this morning.

More RBS in Contact Centres

With regard to ongoing digitalisation, Vodafone Group said: “We see multiple opportunities to leverage the Group’s scale in order to generate best in class cost structures in a digital environment.

“We already have [23,000] employees in Vodafone Shared Service (VSS) centres in India, Egypt and Eastern Europe, where we are now deploying Robotic Process Automation (RPA) to automate manual and repetitive processes.

“We are expanding the scope of VSS to include network operations, IT testing and maintenance activities, unlocking further savings.

See also: EE Beats Vodafone in Birmingham 5G Tests

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