Vodafone NZ: creating momentum is 'hard to do, but also hard to stop'

Vodafone NZ: creating momentum is 'hard to do, but also hard to stop'

Company looks to Salesforce and Oracle to upgrade its internal ICT.

Vodafone NZ's Jason Paris briefs Infratil investors.

Vodafone NZ's Jason Paris briefs Infratil investors.

Credit: Supplied

Vodafone NZ CEO Jason Paris is claiming momentum is behind the telco's turnaround and the company's numbers appear to back that up.

Speaking at an investor day organised by NZX-listed major shareholder Infratil, an upbeat Paris said while the telco's name was changing, it's strategy – to be the best at what customers value the most – was not.

Vodafone is poised to become "One", a brand which denoted the company's ambition to streamline operations and technology to deliver single and effective customer interactions.

Paris told Infratil investors the telco was seeing significant demand for products, networks and the applications that run on them.

Customers had a lot of technology choices, but could benefit from a partner like Vodafone that aggregated the best them – from handsets to cloud, he said.

Vodafone was focused on winning in three areas: post paid mobile, ICT and wholesale, Paris said.

"When you focus on three things, you normally deliver."

Paris presented results for the half year to the end of September 2022 showing total revenue up 4 per cent year on year to $990 million and gross margin up 8 per cent to $557 million.

The enterprise fixed and ICT segment grew 16 per cent to $127 million in the half.

The sale of the company's passive mobile network assets had allowed it to Increasingly focus on 5G and what that could deliver. Paris said.

That focus was also starting to show up in the company's customer experience data after life under the global Vodafone umbrella, during which "the computer did say 'no' for around five years". 

Paris said value creation at Vodafone was not just in mobility but also fixed assets as second largest owner of fixed fibre infrastructure in New Zealand.

Increasingly, value creation was happening in all areas of ICT, including contacts centres, cloud, IoT and more.

"This is the result of deliberate moves over a number of years to create momentum," he said. "It's hard to do but also hard to stop."

Paris also said Vodafone was the fastest growing New Zealand company in ICT, albeit off a low base. However, the analysis behind that claim only included comparisons with the very top tier, Spark and Datacom.

"CDC, Defend, IoT, Amazon Connect – we are in a strong position and enterprise team is doing a brilliant job of selling more services and deepening our relationship with customers," Paris said.

Internally Vodafone had given up on a strategy to rip and replace its legacy applications, instead focusing on upgrades and on removing complexity to cut the need for customer service.

We are moving customers onto best existing stack and then upgrading that with Salesforce and Oracle.," Paris said.

Existing IT was more stable than expected and Vodafone was  squeezing more out of it.

Operational efficiency was sustained and Vodafone was seeing both top line revenue and margin growth.

"We are going to exceed guidance, driven by reclassification of IT from opex to capex, the return of roaming and mobility," Paris said.

Customer churn in the SME segment had halved from 17 per cent when Paris joined the telco five years ago.

The exit from Vodafone TV and a decision to not compete in the commodity broadband market against the energy retailers were also positive moves, he said.

On Vodafone's partial buyout of cyber security firm Defend, Paris described the telco as "basically just a massive sales channel" for that business. 

"We are not changing what makes them successful," he said.

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Tags OracleVodafoneTelecommunicationssalesforcegenesyscall centresOneAWSNZXinfratilDefendAmazon Connectcyber security



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