But Vodafone denies it is ‘buying’ business with ‘unsustainable’ deals
O2 business sales director Ben Dowd has launched a scathing attack on rivals Vodafone, accusing the company of devaluing the B2B industry with financially unviable deals.
Dowd (pictured) contacted Mobile News to respond to Vodafone’s claims that it will overtake O2’s business market share within the next six months (issue 502).
Vodafone head of partner services Tony Bailey said the firm had been winning business from O2, rather than losing it, and was “port-positive” in 2011.
But Dowd has accused Vodafone of “buying” business from O2 customers to build its share and offering “unsustainable” loss-making deals.
Dowd said: “We are probably five percentage points ahead of them in terms of market share. So they really need to be going some to catch us and we need to be going in the opposite direction. That’s simply not the case.
“Vodafone are playing an entirely different game to us. The USP they are trying to win with is on price. It’s not good for the industry.
“We are not really seeing it from Everything Everywhere or even Three. I absolutely see the Vodafone mantra of ‘O2 we are coming to get you, by hook or by crook’ and we have many examples of where Vodafone have been buying the business.”
Examples he gave included Vodafone acquiring a 75-number account with an ARPU of £49, reduced to £13 ARPU on a like-for-like deal.
Another included an account with 113 numbers and an ARPU of £18 on O2 being reduced to £7 on Vodafone, and a deal worth 76 numbers and an ARPU of £79 that was reduced to £20.
“In that situation we will probably walk away,” said Dowd. “I’m not happy to lose the business because on O2 it was good. But after Vodafone won the business, by the end it was bad.
“We will always remain true to our own strategy and be competitive on price. But when the price is brought to a level which involves 75-80 per cent reductions and is economically unviable, we won’t go there.
“It’s simply not a sustainable model and it’s not good for the industry. I don’t believe it portrays mobile operators in a good light to customers if we can just drop our prices like that.”
Vodafone enterprise marketing director Peter Boucher refused to comment on Dowd’s claims but insisted Vodafone continued to outperform its rival in the B2B sector.
Boucher said: “Rather than focusing on what our competitors are doing, our main focus is on our customers and how we can continue to help them to adopt new ways of working.
“We know from our own data that month after month we win more business from O2 than we lose to them. This has helped us outperform O2 in revenue terms for the past three consecutive quarters.”
Vodafone has also this month removed commissions earned by dealers when migrating Vodafone connections to their base in a bid to win share from other networks.