Vodafone Continues Network Upgrades

22 February 2013

After a less than ideal past couple of years, Vodafone Australia is pledging to turn things around in the next twelve months by investing a potential $1 billion in its mobile network.

While the company has yet to reveal the exact cost of the proposed network improvements, it has spent $1.7 billion on network repairs and upgrades over the past two years. Vodafone Chief executive Bill Morrow has announced that 2013 will see the company spending more on its network than ever before in a single year, with a view to create stronger, better coverage and hopefully win back customers.

Many customers will be hoping that Vodafone intends to pour a substantial chunk of this investment into its as-yet-unlaunched 4G network. It’s expected Vodafone’s LTE network will go live sometime in the next six months, although official dates have yet to be announced.

Vodafone has lost around 1.3 million customers since 2010, when its network first began experiencing major issues. Although it’s still Australia’s third biggest telecommunications provider, this substantial drop in subscribers is obviously something the company is desperate to change.

The telco's network upgrades throughout the past two years seem to be paying off, with Vodafone reporting a reduction in dropped calls of over 30% and a halving of customer complaints in 2012. While last year's focus was on rectifying existing network issues, Vodafone aims to spend 2013 expanding network coverage and improving speed and reliability, including rolling out approximately 1800 new sites over the next three years.

Despite suffering a 16% decline in revenue in the last quarter of 2012, Vodafone has received shareholder-backed financing from its owners, Hutchison 3G and Vodafone Group, in order to make the network upgrades possible. However, securing this funding has come at a cost, with Vodafone having cut around 45% of its workforce over the last 12 months and the telco committing itself to slashing operating costs wherever possible.

Vodafone has admitted that Australian number one Telstra has ‘raised the bar’ with the rollout of its 4G LTE network, on which it is planning to invest a further $1.2 billion this year. Vodafone has acknowledged that in order to win back consumer trust it needs to not only match what its rivals are doing, but attempt to surpass it, which will be no small challenge.

Incidentally, Vodafone has been testing its 4G network in Sydney’s eastern suburbs over the past few days, announcing trial speeds of 60-67 Mbps download and 25-30 Mbps upload. Although the tests don’t factor in elements that will arise once the network goes live, such as congestion, local conditions and user numbers, Vodafone are confident users can expect actual download speeds between 2 and 40Mbps, about on par with the speeds offered by Telstra and Optus.


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