Vodafone Opts for Content, Value to Differentiate 4G

Whether there is a new “killer app” for Long Term Evolution remains an unknown possibility. Up to this point, it is fair to say, “faster access” has been the value proposition. Some with longer memories will recall that among the advantages of third generation networks was the creation of a platform for new services, though.

For the first half decade or so after widescale deployment, such new apps did not actually emerge. So the issue is whether, or when, such new apps might emerge for 4G.

Vodafone, it appears, wants to try a little harder to change the value proposition using content and retail pricing and packaging, rather than speed or better coverage, which might be said to be the more traditional value pitches for a mobile broadband or mobile data service.

“While the presumed emphasis on 4G has always been on coverage and network speeds, Vodafone has opted to focus on the content deals and tariff options behind its offer,” says Emeka Obiodu, Ovum principal telco strategy analyst.

There might be another way of looking at the LTE strategy as well. Most service providers, when it is possible to claim it, tout their better coverage or speed. That often comes with a “premium” positioning, as is characteristic of Verizon Wireless in the U.S. market.

To be sure, Vodafone would not concede that it does not have coverage advantages. But it does not seem to be “leading” its marketing with those advantages, and instead is emphasizing content and value.

Obiodu argues that Vodafone wants to avoid the mistakes of the initial 3G introduction, when it was too focused on building and marketing the best network, only to see other competitors emphasize the value proposition, the Ovum researcher says.

“So this time, Vodafone is focusing on getting the commercial proposition right,” he argues.

“We expect the deals with Spotify and Sky Sports to appeal to a lot of customers.”

The focus is on business model innovation. Doubling the data package, and content access are ways of changing the value proposition, convincing customers to spend an additional £5/month, instead of just selling a faster network.

That probably will be important over time, as virtually all the contestants are able to sell faster 5G service, eliminating the distinctiveness of “speed” and, if nothing else changes, drawing attention only to matters such as price.