KEY POINTS:
The local tech blogosphere:
Richard McManus asks here whether vertical search is dead with the launch of Google's new "Universal Search" which groups together numerous search categories (news, video, maps, text etc).
Rod Drury also links to a very good Cringely article on Universal Search.
Aadvark injures himself and discovers the art of typing with one hand.
Vodafone has, on both sides of the Tasman, flatly rejected a claim in Friday's National Business Review that suggested it is attempting to sell its New Zealand and Australian divisions.
Talk of a Vodafone sale surfaces every couple of years, with Australia's second-ranked telco Optus usually fingered as the likely buyer. Indeed, if you look at the direction of Vodafone's international strategy the case for a sale is strong for a number of reasons:
- Vodafone has a stated strategy of getting out of mature markets and with the New Zealand mobile market approaching 100 per cent penetration, we definitely fall into that category.
- New Zealand is likely to see the arrival of a third mobile player in the next year in the form of the newly flush New Zealand Communications (formerly Econet) which will use the same GSM system as Vodafone and likely attempt to poach Vodafone customers who can take their unlocked 021 phones with them. Virtual network operators will also chip away at the cosy duopoly maintained by Vodafone and Telecom.
- Vodafone is being forced by the Commerce Commission to reduce its call termination rates over the next few years which won't do anything to improve the economics of its business.
- Vodafone's Pacific operations (Australia, New Zealand and Fiji) form just a tiny sliver on Vodafone's revenue pie graph. ARPU (average revenue per user) growth in the region isn't spectacular.
- Telstra has failed in its mobile strategy in New Zealand, so if it's really serious about New Zealand, growth by acquisition in mobile could be on the cards.
A recent report from analyst group Ovum (not online) I re-read over the weekend reinforces all of the above and highlights Vodafone's interest in fast-growing markets like India, Eastern Europe and Africa. But there's still a strong case for Vodafone hanging onto its outlying operations:
- It strengthens Vodafone's brand recognition to have operations in the Pacific and boosts its international roaming capabilities.
- Vodafone New Zealand is still a good earner in its own right and is likely to continue to be so.
- With the Ihug purchase last year, Vodafone New Zealand has well and truly been drawn into the group's global strategy of combining mobile and fixed-line services.
- Vodafone is pushing on with its Vodafone at Home product which combines fixed and mobile calling in one unified service. If it is successful, it could prove to be a big thorn in Telecom's side and see Vodafone claim a chunk of the lucrative local calling market.
- An Optus buy isn't a great fit as Optus has no fixed-line assets in New Zealand to complete the triple play of services that would make its business case here work.
So there are decent arguments for a Vodafone sale, but also for the company keeping its local operations. While nothing would surprise me these days with tech and telco mergers and acquisitions happening on a weekly basis, I'm picking Vodafone with hang onto its Australasian assets for at least a few more years.
