Jan Geldmacher, Chief Executive of Vodafone Global Enterprise, discusses co-creation, new markets and partnering with Huawei
Eurocomms.com: When we last spoke 12 months ago, you said moving up the value chain was one of your biggest priorities. How successful have you been?
Geldmacher: Our strategy is predominantly focusing on our core business, which is connectivity.
We connect locations of our customers through IP/fixed, we connect people through mobile and we connect machines through our M2M ability.
Everything we do is based on our infrastructure and connectivity.
On top of that connectivity we move up the value chain.
For example, we go into managed services and co-creation, where we try to get closer to customers by putting our products into their products.
That strategy works, it is very much accepted by our customers.
The share of revenue that we get in managed services and co-creation space is increasing.*
Are you looking at acquisition targets in a bid to drive this strategy further forward?
No. The challenge is to execute against our strategy [with what we have].
After 2-3 years you question whether you have the right strategy and I need to reconfirm that it is the right one.
Nothing is worse than changing strategy every second year.
We continuously talk to our customers via customer advisory boards.
We challenge our customers to feed back to us on whether the strategy we’re working on is what they need.
You also said you were looking to ramp up your efforts in Africa – how is that progressing?
It’s progressing really well. Asia and Africa are our fastest growing markets.
We had a regional director for both areas but decided it was too big of an opportunity and too big of a region so we have split that into two.
We’ve hired a new head of MEA, Niamh Spelman, and opened an office in Dubai where we’ve put our regional HQ.
In Africa, our mobile payments service M-Pesa is a great example of a consumer proposition [that we’ve turned] into an enterprise one.
Security company G4S, for example, were shipping large amounts of cash [in the form of] wages. Now they use M-Pesa… it is safer and easier.
The US is another market you’re looking to grow your business in. What’s happening there?
We have expanded our footprint in the US; for example, we’ve created an IP infrastructure beyond what we picked up from Cable&Wireless.
Previously, we could only support a few customers in the US.
We’ve increased the number of PoPs from nine to 30 to address the needs of US customers.
We’ve had good success so far in selling this to US-headquartered customers and European and Asian customers moving into the US.
The whole idea is to be a single service provider to our customers around the world.
We have also launched a mobility service in the US for MNCs.
The message I would like our customers to understand is that we are a provider of fixed and mobility services globally – I believe that is a clear differentiator.
Our telco rivals can’t do that… they can do fixed but they can’t do mobile.
The biggest challenge for our customers is roaming – with our approach we can make pricing predictable and take away the pain/risk.
Sometimes, mobility costs are so high through roaming that people switch off and resort to wireless LAN, which has security risks.
The more you use, the more you pay model will stay but it will not be an explosion of roaming costs… we will make it a more linear increase and that’s how it should be.
In June, you announced a partnership with Huawei to jointly develop services for the enterprise market. What can you tell us about this?
Huawei is a supplier to Vodafone and we run their IP-VPN infrastructure in parts.
We wanted to expand our relationship by offering cloud and hosting services. Earlier this year we signed a deal to be their exclusive hosting provider in Europe, for example.
Then we have a couple of projects going on where we design customer specific solutions, which is working fine.
On top of all that we do joint product development; for example, we had a very good success with an international sports brand where we created a router that can be connected through the mobile and fixed network [to help them to] roll out new retail locations in Asia.
Without this it takes a while to set up with local providers.
You’ve mentioned the provision of fixed and mobile services a couple of times now; how big an opportunity is this?
There is a lot of growth in this area. We are talking to a lot of our customers about it.
Many are seriously considering moving away from classic PBX environments and heading to the cloud.
It differs from region to region – the risk appetite is higher in different places. From my perspective it has just started.
Click here to read the follow-up: Vodafone struggles to solve the co-creation conundrum