Vodafone Loses Its Way(finder)

Vodafone Group plc (NYSE: VOD) has done a quick U-turn on offering its own navigation services as it confirmed reports that it plans to close its Wayfinder Systems AB subsidiary, based in Malmo, Sweden.

Vodafone splashed out SEK239 million (US$33 million) to buy Wayfinder in December 2008 in a bid to offer its own maps, location-based services, and turn-by-turn voice directions to mobile devices. (See Vodafone Snags Wayfinder and Vodafone to Buy Wayfinder.)

That may have been a good idea at the time, but the business case for charging consumers for navigation and location-based services has been effectively destroyed by the likes of Google (Nasdaq: GOOG) and Nokia Corp. (NYSE: NOK), which offer navigation services for free on certain devices. (See Nokia Offers Ovi Maps for Free, Nokia Beefs Up Map, Messaging Services, Nokia Nabs Navteq for $8B, and No Cupcake for You!)

Vodafone emailed the following statement to Light Reading Mobile:

    Vodafone has announced the proposed closure of its Wayfinder Systems AB subsidiary, headquartered in Malmo. The competitive environment for turn-by-turn navigation has changed significantly in the last six months as competitors have chosen to make this service free to customers. As a result, Vodafone is considering its options such as ceasing to offer its own turn-by-turn navigation service. In the event it does, it will remain committed to working with partners to incorporate these and other location-based services into the broader Vodafone 360 suite.

Wayfinder was an integral part of Vodafone's revamp of its mobile Internet services, which the operator relaunched as 360 in September last year. Several Wayfinder services are already available from the 360 suite of services. For example, maps are embedded and downloadable to the Vodafone 360 H1 and H2 devices; a location application is in the 360 App Shop, as well as Apple Inc. (Nasdaq: AAPL)'s iTunes App Store; and a turn-by-turn navigation service is embedded and downloadable to 360 devices, according to a Vodafone spokeswoman. (See Vodafone Live! Is Dead!)

Vodafone has not yet revealed which partners it will use to offer such services in the future. But a spokeswoman says that the Wayfinder services will continue to work until replacements are integrated into 360.

The closure of Wayfinder will result in a total of 95 job cuts in Sweden, Romania, and the UK.

— Michelle Donegan, European Editor, Light Reading Mobile

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