The UK and Spain, Vodafone’s old cash cow operations in Europe, have spluttered enough in the quarter to June 30 to see it adjust its annual revenue forecast for the conservative end of its range.
In its home market it shed customers, its churn was up and its voice revenues were down.
Sure, data revenues rallied so the UK operation retained buoyancy, but the City got the jitters nonetheless and the stock market value of the telecoms industry was slashed.
France Telecom, Deutsche Telekom and Telefónica have all seen their values slump in a moment.
The resilient mobile trade is not immune to the vagaries of the economy either, admitted Sarin.
Anyone who’s watched Carphone’s share price tumble since the start of the year – a decline its mammoth Best Buy deal failed to reverse – will hardly be surprised.
And, yes, mobile is considered a ‘necessity’ these days, but so is food – if everyone is shopping at Aldi for their steak dinners, then they’re likely watching their mobile spend too.
Consumers and businesses alike. Which isn’t easily reconciled with the network message in saturated Western markets on ARPU.
Vodafone clearly saw it coming too, with its large scale cost cutting exercise at UK head office earlier this year.
And Vodafone chief Sarin, to his credit, acted early to expand Vodafone into emerging markets – and 140,000 customers were added in Eastern Europe, Asia and Africa.
He has attempted to future-proof the group business abroad to compensate for rough conditions at home.
Vodafone might, in that regard, likely enjoy happier times than some of its competitors as the economic blues deepen in Europe, where European Commissioner Viviane Reding looks out across smarting airtime corporations and happier holidaymakers.
Termination rates have polarised the old establishment and the new tech players.
3 UK boss Kevin Russell remarked upon it frankly at a Westminister e-forum last week, suggesting wholesale prices to networks are so high it has forced 3 to put its retail prices up – or at least, restricted it from bringing them down.
The incumbent networks’ dislike of Reding is well documented.
The national print press and television media revealed the collusion between networks and government through emails exchanged between the parties last year, obtained under the freedom of information act.
"Get that ice!" was how one government minister broke the news to one network of minimal cuts to roaming tariffs last year.
Vodafone’s latest results, and its declining voice revenues in the West, give retrospective justification to the networks’ concerns over termination rates and roaming cuts.
And it is only a hop, skip and a jump to EasyAir, which offered services to GSM Gateway operators at the start of the decade before selling its base to Opal/Carphone and becoming embroiled in a bitter and long running legal battle.
The same for Floe Telecom and VIP Communications, former GSM Gateway operators, in the High Court of Appeal over the termination of their supply contracts by Vodafone and T-Mobile respectfully.
GSM Gateways offered ways around termination rates by routing calls on-network. As with Reding’s recent actions, the consumer won and the networks lost.
And so they outlawed it.
Anyone running a GSM Gateway today does so at their own risk, according to network law.
But it might just be Brussels says different.
If the EasyAir damages claim against Carphone holds water, then it legitimises GSM Gateways. Like instant karma to the networks.