Vodafone 2015 Annual Report Download - page 24

Our strategy
Consumer Europe
While voice and messaging remain crucial to our customers, the
demand for data continues to grow, both through mobile and through
xed. This growth provides a great opportunity for Vodafone and for our
customers as we work towards providing the best data experience
to more and more customers.
Growing data penetration
Voice and messaging remain crucial to all
of our customers and we have improved voice
quality dramatically, with only around 1 in 170
calls dropped on average compared with
1in 110 in September 2013. However, the rise
of smartphones and other connected devices
is leading more and more of our customers
to use data on the move. Already over
half of our customers use data, with 52%
smartphone penetration across our base,
and we have a great opportunity to extend
this further.
To help data reach more and more people
we provide low-priced entry level plans with
small allowances, and combine these with
affordable handsets, such as our Vodafone
branded devices. During the year, we sold over
3.4 million Vodafone branded smartphones
across Europe.
4G driving increased usage
The arrival of 4G in Europe has had
a signicant impact – both on our business
and on the experience our customers enjoy.
4G is attractive because it offers much faster
speeds and a more reliable experience,
enabling customers to watch videos, stream
music and enjoy the internet better than
ever before.
We have 15.9 million 4G customers across
Europe, compared to only 3.3 million
a year ago.
4G is driving an increase in data usage, both
in absolute and per-user terms. On average our
4G customers use twice as much data as our
3G customers and that has helped average
smartphone usage increase from 473MB
to 755MB during the year. This is supported
by the large increase in video streaming, which
now accounts for 48% of data trafc.
Bundling content with our 4G plans is also
helping to increase data usage, as discussed
on page 23.
Monetising increased usage
As customers use more and more data
it is important that we monetise this.
Higher usage has helped drive higher revenues
per customer in some markets, especially
in the UK where 4G data usage trends are
particularly strong. In some markets, average
revenue per user (‘ARPU’) has continued to fall
as the benet of increased data usage has not
offset the fall in market prices.
Context
a More and more of our customers are
using data, increasingly on 4G
a Average smartphone data usage
is accelerating, increasing 60% over
the year
a Customers want simplicity and worry-
free bills
a We are now a major xed broadband and
TV provider
Where we are going
a We are encouraging more customers
to switch to data and to use more data
a We are expanding our 4G network to over
90% population coverage by March 2016
a We continue to enable worry-free
usage through our Vodafone Red and
roaming plans
a We are stimulating data usage through
bundling content
a We are increasingly providing mobile and
xed services together
a We are improving the experience
we offer customers through modernising
our stores and investing in better
customer service
37
2013 2014 2015
37
48
0
20
40
60
Video as a % of data trafc %
Project Spring achievements
a Taking 4G coverage to 72%
a Reducing dropped calls to 0.6%
a Increasing average smartphone data
usage to 755MB
a Modernising around 3,250 retail stores
141%
of service revenue from consumers in Europe
European smartphone penetration %
38
2013 2014 2015
45
52
30
50
40
60
3G vs. 4G average monthly GB
data usage1
0
0.5
1.0
1.5
2.0
Netherlands Spain
0.9
1.9
0.7
1.6
Roamers registered million
on “Daily offer”
3.0
2013 2014 2015
14.2
20.0
0
10
20
30
Note:
1 Based on 3G to 4G cohort analysis
Vodafone Group Plc
Annual Report 2015
22