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Summary:

Vodafone’s CEO Arun Sarin tells Businessweek that he expects the combination of social networks, mobile advertising, and mobile video (along with other “advanced mobile applications) will generate 10% of the company’s revenue within three or four years. We’re thinking that’s rather optimistic. We expect these services […]

Vodafone’s CEO Arun Sarin tells Businessweek that he expects the combination of social networks, mobile advertising, and mobile video (along with other “advanced mobile applications) will generate 10% of the company’s revenue within three or four years. We’re thinking that’s rather optimistic.

We expect these services to generate 10% of our revenue within three or four years,” he says. Vodafone generated $29.4 billion in revenue and $6.6 billion in profit during the first half of the year, beating analyst forecasts.

We looked at their revenue projections – about $59.12 billion for the year ending March 2007 and $62.29 billion for year ending March 2008. At an average annual growth rate of 5%, the company could have sales of around $70 billion by 2010. In other words, 10% of the company’s revenue would work out to about $7 billion. Yikes…. that’s just a little less than what Google is estimated to make in sales this year. That is a lot of money from those advanced mobile applications!

Chew on that, while you chew that turkey! Happy Thanksgiving all!

  1. I can’t see this happening. Companies are investing far too much into the social networking fad. I hear/see ads for Helio on the radio and tv all day long, yet Ive yet to see one person using their Helio to access Myspace. For a company like Vodafone to put such stock into ‘advanced mobile communications’ seems ludicrous. Just my 2 cents though.

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  2. I am surprised that company after company falls into this trap. Voice, not data, is the killer app.

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  3. Vodafone’s talking about this “data revenue” part for about 2-3 years now. According to their first plans, data should be at 20% of total revenues around now. (however, they’re cheating a bit by counting SMS to data as well)
    When Arun has arrived, he ordered a quick research into the guts of the company on what’s making real money among all these advanceds. Turned out that nothing. So the first thought was to concentrate on what Voda did best – voice, SMS. However, not so long after, the whole thing was forgotten – lead by Vodafone Germany, from where most of these new things were coming. (Thomas Geitner was the man, as I know, he’s no longer there.)

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  4. The think people at Business Week have misunderstood Vodafone. The 10% target refers to the whole of the “MobilePlus” strategy, which whilst including elements like social networking also involve a move into broadband and fixed line communications in general.

    If you look at the 10% target in this context, it is not so difficult to achieve, especially if Arun Sarin gets his wallet out and makes a few acquisitions.

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  5. I wrote this a few weeks ago and have to repeat my comments on Vodafone here.

    So far, mobile operators have been rubbish at addressing the needs of enterprises in the 21st century. Vodafone UK now plans to address the demand through,” an exclusive partnership and the acquisition of two companies”, all of which look promising.

    The bit that really put the frighteners on gomonews though is Vodafone UK describing its actions “as part of its longer-term plan to evolve from a mobile-focused company to a total communications provider offering seamless communications to its customers, regardless of network or technology.”

    Oh boy has someone overdosed on the convergence hallucination pills. Hard to believe that a load of senior execs agreed to this – surely someone had the courage to shout ‘bollix’*? After all, Vodafone is yet to get the hang of running a 3G business, never mind trying to transform itself into something it utterly lacks the expertise, staff and myriad other resources to pull off.

    Anyway, for anyone still able to concentrate after their chin has hit the desk at high speed, here are the details of what Vodafone UK has done to accommodate 21st century business practices.

    Firstly, it has signed a conditional contract to acquire Aspective Limited, a consultancy and service provider that specialises in mobilising enterprise applications. The operator has also acquired Isis Telecommunications Management Limited, a provider of customer services, fleet management and bespoke managed services to the business market.

    In addition, Vodafone UK has signed an exclusive strategic partnership with Fiberlink, a specialist in secure mobile working. It will be the only mobile provider of Fiberlink in the UK and will offer Fiberlink’s platform exclusively for mobile workforce services in the UK. The agreement with Fiberlink is effective from January 1 2007 for three years. Allegedly, Fiberlink’s Extend360 Mobility Platform enables mobile workers to connect quickly, securely and easily to the applications and data they need when working away from the office.

    There is, of course, the small matter of ensuring that the mothership makes the most of her new acquisitions and the exclusive deal, which is by no means guaranteed, but in principle this is a positive move. Please just stop taking the pills.

    • bollix – (v.t. [vulg] to bungle, confuse according to the Oxford English Dictionary), pronounced bollocks
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  6. make money from home…

    Today’s world is a tough place. Only god know what’s going to happen in the future. Lets hope the world will find some peace soon and our future will be bright…

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  7. [...] Katie Fehrenbacher from GigaOM reports on an interesting quote from Vodafone’s CEO Arun Sarin in a Businessweek article: We expect these services to generate 10% of our revenue within three or four years,” he says. Vodafone generated $29.4 billion in revenue and $6.6 billion in profit during the first half of the year, beating analyst forecasts. [...]

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