Wednesday, March 01, 2006

Ovum: Mobiltel becomes part of the Vodafone partner network

Carrie Pawsey at Ovum looks at the Vodafone partner network agreement with Mobiltel in Bulgaria. Pawsey states "this brings the total number of partner networks to 32 countries, which together have in excess of 125 million subscribers across every continent on the globe." Pawsey writes "you have to acknowledge the scale of the Vodafone partner network and commend the operator for its innovative approach to widening its channels to market." She says the "Vodafone partner network is a scheme whereby other mobile operators can benefit by:"

  • selling Vodafone-branded products without having to be an equity subsidiary
  • allowing operators to become part of the Vodafone Group handset procurement group - thus obtaining volume discounts and gaining access to devices that smaller operators might otherwise not have been able to obtain
  • enabling partner operators to become part of the Vodafone roaming alliance, which now encompasses a total of 56 countries. This means that subscribers of any of these 56 operators will given preferential roaming rates if they use the partner networks when travelling, thus encouraging the revenues to remain within the roaming alliance.
Pawsey concludes that:
The partner network group appears to be a key strategy for Vodafone, with other recent deals announced in Malaysia, Sri Lanka and Indonesia, as well as the extensive partner network agreement Vodafone signed with America Moviles in Latin America. This huge deal, signed in November 2005, brought 13 Latin American markets to the alliance - adding a staggering 187 million subscribers (which is about the size of the FreeMove alliance now that Telefonica is leaving as part of its conditions on the sale of O2). The partner network alliance allows Vodafone to enter potentially high-growth mobile markets, but with a low-risk, no-equity strategy.