Vodafone NZ gains momentum in ICT markets as transformation progresses

Vodafone NZ gains momentum in ICT markets as transformation progresses

Vodafone NZ is on track to meet guidance despite an expected $30 million impact from a new cloud accounting standard.

Credit: Supplied

Vodafone New Zealand is making progress in target ICT services markets as it quietly stabilises and transforms its own technology landscape.

Updating the sharemarket on the progress of its major investments, 49.95 per cent shareholder Infratil reported Vodafone was gaining momentum in ICT markets with significant corporate wins and future opportunities identified in security, cloud and internet of things (IoT).

Strategic target ICT markets, or "families" in Vodafone parlance, are cloud, connectivity, security and communications and collaboration.

Vodafone NZ was on track to meet 2022 guidance despite that not including the potential impact of the new financial reporting standard for software as a service investment. 

"While impact is being finalised, it is expected that approximately $30 million of previously capitalised expenditure will now be recognised as operating expenditure in the statement of comprehensive income for the year ended 31 March 2022," Infratil reported.

Plans for the potential separation and capital release of Vodafone's passive mobile infrastructure tower assets, the largest in New Zealand, were at an "advanced stage of preparation". 

Vodafone NZ believed a focused independent tower entity could best meet future demand and service needs.

Vodafone was also getting its own IT shop in order, improving customer experience, stabilising IT systems, increasing network utilisation, improving capability, and removing significant cost. Investment in IT system separation from Vodafone Group will also be lower due to the near completion of the company's ERP programme in the 2022 financial year.

"Phase two sees us building on these gains and benefiting from reinvestment to maximise the value of our infrastructure assets while leveraging our improved capability to grow revenue," Infratil told shareholders.

"The capability improvements we are making are increasing our executional confidence and de-risking our plans."

Key to that was improving the customer experience with enhanced self-service, improved reliability and lower-cost digital systems.

"Our customer service measures are the best since records began, but we have higher aspirations still," Infratil reported.

A second phase of sales and service channel improvement was underway with a specific focus on the SME segment.

Vodafone's legacy IT systems were stable; however flexibility and product development cycles were challenging. IT platform modernisation was underway with over 100,000 customers migrated off legacy, fixed and mobile products and plans.

Around 60 per cent of customers were using Vodafone's app regularly, leaving significant upside still available.

Significant opex and capex efficiencies had been realised through cost management initiatives and a focus on removing business complexity with further cost, productivity, customer experience and trading benefits expected from current investments over the medium term.

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