Vodafone claims ‘two horse race’ with O2

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But O2 claims success already by broadening focus to guard against being ‘first among losers’ within mobile sector

Vodafone UK chief executive Guy Laurence (pictured left) declared the market a “two-horse race” between itself and O2 last week, summarily dismissing the challenge of Everything Everywhere, the joint venture between Orange and T-Mobile, and the UK leader by scale.

Vodafone UK reported its service revenue had grown by 5.2 per cent to £1,230 billion in the quarter to September 30, compared with the same period in 2009, and its rate of improvement had jumped 4.5 per cent sequentially.

O2 recorded growth of 6.3 per cent to £1,426 million, its growth rate up 1.2 per cent quarter-on-quarter. Everything Everywhere saw service revenue slide 0.1 per cent to £1.586 million.

Vodafone closed the gap to O2 in profit terms by around 8.5 per cent in the quarter, with both posting increases. It claimed it has added more customers in the year to date, also; 1,026 million compared with 814,000.

Laurence said: “It is a heated industry, and you look for warning signs; you look at the respective rates of growth in service revenue, the fact that the gap [to O2] is closing in terms of EBITDA, the fact that we are adding more customers than O2. This is an inflection point. We have two huge growth players in the UK market, and then one joint venture.”

In response, an Everything Everywhere spokesperson said:  “Vodafone has fallen from market leader to third, which must be frustrating for it. More recently, it has had a couple of decent quarters, but it seems early for it to be dismissing the competitive threat of Everything Everywhere.

“The UK market remains highly competitive, but with the benefits of our new-found scale as market leader, we look forward to competing with all operators, Vodafone included.”

Meanwhile, O2 UK chief executive Ronan Dunne (pictured right) remarked: “It is not about Vodafone or Everything Everywhere for us. Because, you know, my minutes are never going to be that different to those from Vodafone or BT. What is different is the quality of service and the breadth of our offer.

“Our core business is not mobile anymore, it is communications. If we don’t take this view, then we’re just competing in a declining market, and I am just first among losers.”

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