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Vodafone Smartens Up for Smartphones

As Vodafone Group plc (NYSE: VOD) reported financial results Tuesday for the first half of the year, the operator provided an update on how it is preparing the network for a surge in smartphone users and further mobile data traffic growth. (See Euronews: Vodafone Upbeat on Full-Year Outlook .)

First, here are the half-year metrics Vodafone shared about data service revenues and smartphone penetration:

  • Mobile data service revenue was up 23.8 percent to £3.1 billion (US$4.9 billion), compared with the same period last year, and accounted for 14 percent of the total £22 billion ($35 billion) service revenue in the period.

  • In Europe, where Vodafone has 149 million customers as of the end of September, 21.7 percent of the customer base has a smartphone.

  • Twenty-one percent of mobile data traffic in Europe came from smartphones in the second quarter, which is up from 16 percent in the first quarter.

  • In Europe, the average monthly usage per smartphone user was 130MB in the second quarter, whereas the average usage per user on other mobile broadband devices, such as dongles or laptops, was 1.4GB.

  • In emerging markets, Vodafone illustrated the potential for data adoption by pointing out that 13.7 million of its customers now use Opera Mini -- a Web browser, it explains, that makes it easier to use data over 2G networks -- and that figure is up 98 percent compared with the same period last year.

    To keep up with the surge in data traffic and influx of smartphones on its network, Vodafone has been upgrading its radio access and backhaul infrastructure to reduce costs and improve efficiencies during the first half of the year. While Vodafone did not provide figures today on how much has been saved by or spent on these projects, it did give an update on some progress.

  • For high-capacity backhaul in Europe, specifically, Vodafone said it has either IP microwave, fiber or managed Ethernet connected to 29 percent of cell sites, which marks an increase of 9 percentage points during the financial first half of the year.

  • In the radio access network (RAN) in Europe, Vodafone said 78 percent of its 3G cell sites have been upgraded to 14.4 Mbit/s or higher on the downlink -- which Vodafone referred to as HSDPA+ -- while 53 percent of 3G sites have been upgraded to 3 Mbit/s or higher on the uplink with HSUPA, which are increases of 11 percentage points and 9 percentage points, respectively, during the first half of the year.

  • In Germany, Vodafone has deployed 1,300 Long Term Evolution (LTE) sites and users are getting an average download speed of between 6 Mbit/s and 12 Mbit/s. Vodafone CEO Vittorio Colao noted that with LTE, the network latency is about 35 milliseconds to 60 milliseconds, which he likened to a "fixed-line level" for latency.

  • Vodafone also said that it has deployed "Single RAN" equipment -- which would be base station equipment that supports 2G, 3G as well as LTE technologies -- at 12 percent of its cell sites in its seven largest markets.

    In addition to the infrastructure changes, Vodafone also stepped up its use of traffic management. The operator said it has implemented Web and video optimization in nine of its markets, which it claims has resulted in traffic volume cuts ranging from 15 percent to 30 percent. Vodafone also said it has cut peer-to-peer traffic in certain "key markets" by 20 percent to 30 percent, but it did not specify the countries.

    — Michelle Donegan, European Editor, Light Reading Mobile

  • FastCache 12/5/2012 | 4:49:28 PM
    re: Vodafone Smartens Up for Smartphones

    Definitely agree that Vodafone is providing useful stats for assessing how they are progressing with smartphone centric business.  It would be great to get comparable reports from other players.

    sleinen 12/5/2012 | 4:49:28 PM
    re: Vodafone Smartens Up for Smartphones

    "Vodafone said 78 percent of its 3G cell sites have been upgraded to 14.4 Mbit/s or higher, while 53 percent of 3G sites have been upgraded to 3 Mbit/s or higher" - is it possible that the percentages have been swapped here? All 14.4Mb/s-or-higher sites are also 3Mb/s-or-higher, so the second percentage should be at least as high as the first, no?


    Lots of interesting stats by the way, kudos to Vodafone for sharing those.

    Michelle Donegan 12/5/2012 | 4:49:26 PM
    re: Vodafone Smartens Up for Smartphones

    Hi sleinen,


    Thanks for pointing that out -- that was my mistake there. The article has been corrected now to show that the two different percentages refer to upgrades on the downlink and uplink, respctively. Vodafone broke out HSDPA and HSUPA upgrades stats.


    So, 78% of Vodafone's cell sites have been upgraded to 14.4Mbit/s or higher on the downlink and 53% have been upgraded to 3Mbit/s or higher on the uplink.


    Hope that's more clear now.


    Michelle


     

    sleinen 12/5/2012 | 4:49:25 PM
    re: Vodafone Smartens Up for Smartphones

    Thanks, it all makes sense now (and thanks in general for compiling all these numbers!)

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