Vodafone Germany appears to lag behind Telekom & O2 with its current online sales strategy for new client smartphone bundled plans. Vodafone’s online store offers devices with its Red XS (4GB), Red S (10GB) and Red M (20GB) plans, or 2-40GB Young plans1. O2 and Telekom offer unlimited data plans to purchase with a smartphone direct from their online stores.
This analysis draws on operator data from 3 Strategy Analytics services: PriceTRAX (weekly smartphone pricing), Teligen (operator tariff tracking) & Service Provider Strategies (market share).
PriceTRAX data indicates Vodafone did sell devices with an unlimited Red XL plan online from July to November 2018 however Red XL has not returned to Vodafone direct online retail yet2 even with the rollout of 5G offers.
Teligen confirmed that Vodafone does have 2 additional plans available: Red L (online) currently includes 40GB data (32GB + 8GB offer) and Red XL (offline) provides unlimited data3. The plans are available online via third party retailers such as Saturn & Media Markt.
Vodafone trades data allowance for lower initial Total Monthly Cost (TMC). O2 recently reclaimed the lowest TMC with their new Free Unlimited Basic plan at the expense of speed (2 Mbps) compared to Telekom’s 300 Mbps & Vodafone’s 225 Mbps. Telekom offers unlimited data but sacrifices plan price, costing on average 42% more than O2’s unlimited plan and three times higher than Vodafone Red M smartphone bundle plan in 2019.
Vodafone routinely discounts plan prices for the first 6-12 months of a contract and offers online-exclusive data boosts. On the 9th March 2020 Vodafone launched an online offer discounting Red plan smartphone bundles by 10€/month for the first 12 months with an additional 25% extra data on Red S & Red M.
A simplified cost per GB per month analysis4 shows Vodafone maintains the highest GB price for online plans, heavily influenced by the lack of unlimited data (aside from August to October 2018). Additional plan allowances across operators are very similar so have not been considered for simplicity.
Based on February 2020’s highest available data allowance smartphone bundle plans O2 had the lowest cost per GB at 0.1€/GB/month, followed by Telekom at 0.32€/GB/month. Vodafone’s highest data allowance in February 2020 was the Young L 40GB plan with the price being 1.07€/GB/month for the full plan price or 0.75€/GB/month for the discounted 12 months. Young L is only available to people under 28 years of age. Vodafone’s Red M cost was 1.25€/GB/month for the first 12 months rising to 3.44€/GB/month for months 13-24.
For a comprehensive comparison, value-adds such as Vodafone Pass, free gifts, bonuses and discounted SIMs could be considered which would make the plans more cost effective.
Service Provider Strategies (SPS) operator market share figures indicate that Vodafone Germany’s market share was 24.9% in Q4 2019 (down 0.5% YoY). O2 also saw a loss of 0.1% at 36.6% and Telekom gained ground at 38.5% (up 0.6% YoY).
Vodafone’s slow market share erosion may, in part, be due to their limited online data offers and high price per GB plans. O2 could gain share following this year’s recent plan revamp.
With the progression of 5G, unlimited data appears to be the way to go based on the market share data; Telekom gained 1.5% since launching unlimited data. However as plans advance towards unlimited everything, differentiation becomes more difficult.
Strategy Analytics’ overview approach across services can help navigate the minefield and provide multidisciplinary insights into overcoming the problems faced by network operators. Contact us for more details:
Phill Maling: pmaling@strategyanalytics.com or Stuart Robinson: srobinson@strategyanalytics.com
1Data allowances correct at the time of writing. Young plans for people under the age of 28.
2 https://www.vodafone.de/privat/handys-tablets-tarife/alle-smartphones.html
3 https://www.vodafone.de/privat/service/red-xl-unlimited.html
4Nominal 300GB data allocated to unlimited plans for calculation purposes.