The past couple of years have not been kind to Vodafone in the UK. O2 and Orange are formidable competitors that seem to have outsmarted Vodafone at almost every turn and have won some major victories in the battle for the consumer. Vodafone’s shown significant improvements in recent months, but there’s still some way to go.
Vodafone’s strength has always come from the enterprise market and it continues to thrive in a sector where the larger the customer, the more share Vodafone tends to enjoy. However, it’s been facing challenges in the small and medium business (SMB) segment similar to those in the consumer market.
In the diverse and fragmented SMB market, distribution channels are hugely important. They can be a notoriously fickle route to market but they respond to planning, organisation and support much more positively than similar consumer channels, where the relationships are a much less important aspect of account management. When operators get it right, the rewards are immense.
Members of the relatively new team at Vodafone knew this from their time with BT, Avaya, Nortel and other major enterprise suppliers, and they’re now seeking to bring this discipline to the newly created Vodafone Partner Programme. In this initiative, Vodafone has re-aligned a diverse portfolio of companies including Yes Telecom and Project Telecom under a single banner. It aims to offer consistent and long-term agreements to partners — three-year contracts are the basis of the programme. It also hopes to reassure partners of Vodafone’s commitment to this space and set out criteria that let dealers improve their terms.
When launching the programme Vodafone declined to share these terms, but I’m sure the team understands it’ll have to match or beat terms offered elsewhere to bring channel partners closer to them. The announcement seems to have been well received by the 25 or so dealers that have been given Platinum status in the new scheme. We’ll hear more from the Gold and Silver dealers as the programme rolls out.
Vodafone Corporate has been re-inventing itself over the past couple of years. Vodafone Italy, Germany and Portugal have seen huge success providing a total communications solution rather than just a mobile service. In offering mobile and fixed voice and data, as well as a range of services expected of a more-traditional telco, they’ve thrived and put pressure on competitors.
Vodafone’s seeking to do the same in the UK and this initiative’s one of the weapons in its arsenal. But not all its new schemes are going to plan. The UK roll-out of One Net, Vodafone’s unified communications product for SMBs, has been troubled, and 12 months after it was announced, it remains a niche product in this country.
Vodafone’s enormous expansion into distribution through independent software vendors and value-added retailers is taking longer than it thought and the planned doubling of its partners has yet to materialise. Finally, the competitive intensity of the market has been stiffer than anyone expected and that’s holding up progress.
That said, this is a welcome move from Vodafone. The dealers we speak with regularly all tell us that Vodafone appears to be listening and acting on their concerns once again and this long-term commitment’s important to help them plan their own businesses. They also tell us that Vodafone’s being competitive in its commercial terms and that they’re more committed to Vodafone in return. Dealers also think this is a timely move by Vodafone — O2’s less focussed on this channel than it used to be and Orange and T-Mobile (about to become just Orange Business Services) are concentrating more on budgets and reorganisations.
Vodafone UK still has a long way to go to get back to where it used to be, but it’s improving day by day. Its consumer channel managers could take a lead from their enterprise counterparts and provide channel partners with this kind of organisation, consistency and delivery. In a UK market undergoing changes we’ve not seen for 20 years, this is the time to do it.
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