Vodafone's Middlemen Mission

Singlepoint purchase is latest attempt to cut out the middleman and bolster revenue

August 12, 2003

1 Min Read
Vodafone's Middlemen Mission

Vodafone Group plc's (NYSE: VOD) £405 million (US$649 million) acquisition of U.K. service provider Singlepoint is a clear attempt to gain control over distribution channels for its services and so profit from increased margins (see Vodafone Acquires Singlepoint).

The deal gives the wireless behemoth the opportunity to forge closer ties with its 1.5 million customers managed by Singlepoint, representing 27 percent of the carrier’s contract customers in the U.K.

According to Vodafone UK CEO Gavin Darby, the Singlepoint deal, coupled with last week’s £155 million ($248 million) acquisition of corporate reseller Project Telecom, increases the carrier’s direct access to its contract customer base in the U.K. to 90 percent.

“This will give us greater flexibility to develop customer usage of both voice and data services and to offer a consistency of service and products to an even larger section of our customer base,” confirms Darby in a statement.

Analysts believe the acquisition is indicative of the marked shift in carrier attitude towards customer ownership. “It is another example of the way carriers want to move from simply providing a service to actually owning the customer,” comments IDC’s Paolo Pescatore. “They want to be on top of everything -- billing, customer care, and providing the service.”

Such a move could prove critical, given the carrier’s recent troubles in persuading customers to spend more on data services (see Vodafone's Data Use Drags).

— Justin Springham, Senior Editor, Europe, Unstrung

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