2. The Australian Telecommunications Industry
Telecommunication companies are those that operate, maintain or provide access to facilities
for the transmission of voice and/or data via a wired and/or wireless network
Wired Telecommunications
Wireless Telecommunications
INDUSTRY GROWTH
8.9%
INDUSTRY GROWTH
4.3%
$
REVENUE $11.8bn
PROFIT $2.7bn
13 BUSINESSES
A market saturated with products,
where innovation (has been) lacking
for some time
$
REVENUE $20.8bn
PROFIT $2.7bn
56 BUSINESSES
Technology continues to advance at
a fast rate, facilitating a proliferation
of new products and services
The Analyst view of the Sector is somewhat basic…
Source: IBIS World Report (May 2013)
3. Telecommunications Industry by Product Bundles
Wired Telecommunications
Wireless Telecommunications
PSTN
Internet (ISPs)
Mobile Phones
Public Switched Telephone
Network: Mainly copper or
fibre based network carrying
primarily voice communication.
With high initial cost, typically
established by governments
Internet service providers
offering a mixture of fixed and
wireless technologies providing
data-access to the Internet
Mobile phone providers
offering handset
plans/bundles, either owning
the network (carriers) or
reselling the network (mobile
virtual network operators –
MVNOs)
Competition on at least three planes
4. Market Competitors across Products
PSTN
Internet (ISPs)
Mobile Phones
[30+ more…]
Competitive and commoditised - demand for constant connectivity is
driving product substitution & creation of new industries
5. The overall Landscape is changing
Technologic
Faster networks; 4G, NBN, wireless.
Smartphone revolution – mobile
applications, video streaming, GPS
mapping, internet browsing.
Increase in VOIP and IPTV demand.
Economic
HH income increasing.
Increasing population.
Businesses need for e-commerce services.
Falling cost of data storage
Rising cost of imports on AUD Forex
Social
Environmental
Gen Y early adopters of technology.
Consumer desire for constant
connectivity.
Highest penetration of smartphone
adoption (67% of users)
Political
Gov’t plan to build NBN.
Gov’t owns/sells wireless spectrum.
Gov’t sets ownership rules limiting
overseas ownership; Telstra and NBN.
Uncertainty about future application of
carbon tax – on power costs
Provisions need to be made for hardware
recycling
Legal
Spectrum licence required
ACCC guidelines in relation to pricing and
competition.
ISPs must pay Telstra for fixed line
Internet access
Social demand & technological advancements continue to put
pressure on new growth – NBN as a political/disruptor factor
6. PSTN: High margins possible, but being eroded by substitutes
Less attractive mature market
High capital outlay required
Heavy regulation of entry
Entry Threat
0
1
2
3
4
5
6
7
8
9
10
Majors use own network
Several equipment suppliers
Wholesale price regulated
Supply Power
Many customers, few players
Price/margin regulated
Switching costs for buyers
Buyer Power
Duopoly
Established Market Share
High sector exit costs
Rivalry
Substitutes
VoIP & Mobile services
Low exit barriers from service
Substitutes offer higher utility
Profitable for incumbents but unattractive for new entrants
7. Internet: High margins possible, but being eroded by
substitutes
Low entry barriers at low end
Capital needed to enter top tier
Opp for entering with new Technology
Entry Threat
0
1
2
3
4
5
6
7
8
9
10
Majors use own network
Telstra control node access
Gov’t regulated supply
Supply Power
Many customers but many
choices available
Switching costs are falling
Buyer Power
300+ ISPs; Top 4 make up 75% of sector
Acquisition phase during mid-2000s
Rivalry
Substitutes
Some substitution to Mobile
Product substitution within
sector – eg, fixed to wireless
Number of opportunities: need to find a point of difference
8. Mobile: Becoming THE Connected device for many consumers
Low entry barriers for resellers
Many niche-focused players
Price competition for many
Entry Threat
0
1
2
3
4
5
6
7
8
9
10
3 Major players own network
Device manufacturer power
Supply Power
High number of choices
Short innovation cycles
Demand for more
Buyer Power
Intense rivalry, extending to 54+ Mobile
Virtual Network Operators
Including Aldi, Woolworths
Rivalry
Substitutes
Some substitution to Mobile
Product substitution within
sector – eg, fixed to wireless
Demand attractive for competitors – but can limit margins
9. PSTN: now being eroded by a number of substitutes
Services in Operation (Indexed)
Forward Estimates
100
90
Peaked at ~11.5m SIOs in
2002 – since entered decline
Index (vs Peak Point)
80
70
Will have reduced by more
than 40% by 2020
60
50
40
59% EBITDA margin
possible, as capital
investment has ended and no
new entrants are
feasible/attractive
30
20
10
-
PSTN
Cost-minimisation to
maintain profit
Maturity & decline - to be managed for profit by incumbents
10. Internet: characterised by step-changes in technology
Services in Operation (Indexed)
Forward Estimates
100
90
~20% EBITDA margins for
established players
Index (vs Peak Point)
80
70
Rapid growth in new tech –
old drops away quickly
60
50
40
Players now faced with
splitting focus between
Mobile broadband and/of
Fixed evolution to Fibre
30
20
10
-
PSTN
DialUp
Fixed BB
NBN
Mob Bband
Manage timely migration
into new technology
Ongoing success based on shifting with evolving platforms
11. Mobile: platforms continue to evolve- switching happens fast
Services in Operation (Indexed)
Forward Estimates
100
90
~20-30% EBITDA margins for
established players
Index (vs Peak Point)
80
70
Market size starting to
mature – extra services help
60
50
40
30
Choice can be driven by new
network, new device, new
services, and increasingly
data/Internet function
Internet Enabled
20
10
-
PSTN
Internet
Analog
Pre-3G
3G
4G (5G?)
Need to find a tech edge or
other point of difference
Players can focus/differentiate: network, utility, devices…
12. Overall strategy needs to manage multiple products together
Manage Portfolio of Products
Market Share
High
High
Mobile
Internet
4G
Growth Rate
Invest
Low
ADSL
Determine where to sit on Innovation Waves
Low
Fibre
Decide?
3G
Milk
PSTN
Kill
2G
Continual assessment of product/service portfolio over time…
Do we position to Drive, Follow… or Miss, the next step-change
13. NBN: A Telco Game Changer?
Impact of this shift is more uncertain with government change
Change in Government
Change in Leadership
Change in Outcome?
-
-
- What does a new
government, new leadership
and new rollout mean for NBN?
Shift from FTTP to FTTN
Current construction halted
Rollout locations mixed
Ziggy Switkowski (ex-Telstra)
Justin Milne (ex-BigPond)
JB Rousselot (ex-Telstra)
If the rollout is delayed/reduced…
If rollout is accelerated…
Existing PSTN margins can be
maintained for longer
Demand for and innovation
in high-data services go up
More customers will join 4G
& wireless in the interim
New competitors: ranging
from resellers to TV
broadcasters
Range of investment &
development areas will wait..
Existing networks lose value
and ability to monetise
Hofstadter’s Law: It always takes longer than you expect, even
when you take into account Hofstadter’s Law…
14. Is there other clear space to develop a point of difference?
High
Relative Sector Strengths & Gaps… more Red Ocean
9
Commodity Drivers
Service Drivers
1
8
2
New Tech
3
Stickiness
4
Uses of the Pipes
5
1
Invest to Evolve network
Speed/Capacity
2
7
Potential to shine in
Customer Service levels
Offering Level
6
5
3
4
Mobile: new Devices
Internet: new Tools
3
2
4
Low
1
Bundle services together;
Lock longer contracts
0
Find new things to put
through the pipe:
Media, Content, Services
PSTN
Internet
Mobile
Over deliver on core – or move to something new/different
5
15. The Big Question for Telecommunications: What Comes Next?
Maintain
Lead in
Networks
Lead in
Relationships
Manage Costs
Down for Profit
Improve on
Existing Tech
Supplier Focus –
Devices, Tech
Compete/Sacrifice
on Price
Build/Own the
Next Network
Be Best at
Customer Service
Focus vs Broad Target on:
- Consumers
- Small Business
- Enterprise
- Government
Red Competition
Fixed
(Fibre)
Mobile
(5G?)
Invest for Future
Innovations
Stores
Call
Centres
Bundle Telco
Services/Contract
s
Add Uses for
Connections
Add Services
(VoIP, Data Storage)
Invest in Emerging
(eg Mob Payments)
Add Media
Content (TV, News)
Build It
Partner
Blue Differentiation
Players want more than One… but can’t bet on everything
16. Despite an increase in Optus market share, revenues are falling.
= 66.2%
+
S T R AT E G I C P I L L A R S
DRIVE BREAKTHROUGHS IN
CUSTOMER EXPERIENCE.
REVENUES DOWN 4.6%
27.5%
4G
57%
POSTPAID
306K NEW POSTPAID
CUSTOMERS
BUILD NETWORKS FOR DIGITAL
SERVICES.
•
CAPTURE GROWTH FROM
MOBILE DATA.
•
NPAT DOWN 12%
•
BUILD GROUP EFFICIENCIES.
LAUNCHED
MAY 13
64% OF
REVENUE
DRIVEN BY
OPTUS MOBILE
AUSTRALIAN
BUSINESS AWARD
KIDS HELPLINE ‘MAKE
CYBERSPACE A BETTER PLACE’
The carrier is now focused on retention and increasing ARPU by delivering
superior customer service .
Source: Nielsen 2013
17. Vodafone didn’t anticipate the rapid penetration of smartphones… #vodafail
+
= 64.7%
S T R AT E G I C P I L L A R S
RETAIN AND DEFEND THE
BASE.
•
OPERATIONAL
CONSOLIDATION.
18.9%
MOBILE AND WIRELESS
BROADBAND SERVICES
ESTABLISHED
REVENUES
DOWN 9%
(JUNE 2012)
551K CUSTOMERS
CHURNED 1H 2013
2002
MAY 2012
BILL MORROW
APPOINTED AS
NEW CEO
4G
JUNE
2013
Vodafone’s mantra is to earn back trust by overhauling infrastructure and
rebranding through changes in leadership.
Source: Nielsen 2013
18. Despite Telco Industry revenue and NPAT dropping, iiNet showed significant
increases
S T R AT E G I C P I L L A R S
20 YEARS
MICHAEL
MALONE AS CEO
15%
NPAT UP 64%
20,000
SALES, SERVICE AND THE
NBN
•
REVENUES UP 13%
•
PRODUCTS PER
CUSTOMER
•
BUSINESS SEGMENT
•
INTEGRATION AND COSTOUTS
NBN
Customers
Sustainable growth through strategic acquisitions ensuring the iiNet customer
service model is incorporated
Source: iinet Annual Report 2013
19. Simple sales model with a unlimited plans paying dividends for TPG
REVENUES UP 9%
S T R AT E G I C P I L L A R S
FIBRE TO HIGH DENSITY
FOCUS ON VALUE
•
MOBILE
•
10%
•
•
NPAT UP 64%
BROADBAND
BROADBAND AND
TELEPHONY SERVICES
100Mbs
FIBRE OPTIC BROADBAND
Building a fibre network with a focus on high density to compete against NBN
while delivering value to everyday Australians
Source: Nielsen 2013
20. Telstra Rivals: Placing Bets on the Board
Maintain
Manage Costs
Down for Profit
Lead in
Networks
Lead in
Relationships
Add Uses for
Connections
Supplier Focus –
Devices, Tech
Add Services
Build/Own the
Next Network
Be Best at
Customer Service
Invest in Emerging
Fixed
(Fibre)
Compete/Sacrifice
on Price
Improve on
Existing Tech
Stores
Mobile
(5G?)
Invest for Future
Innovations
Call
Centres
Bundle Telco
Services/Contracts
(VoIP, Data Storage)
(eg Mob Payments)
Add Media
Content (TV, News)
Build It
Partner
Relationship management continues to be a hygiene for this
industry, with differentiation to be achieved through investment in
new content and services innovation.
Industry analysts define the industry as companies that operate, maintain or provide access to facilities for the transmission of voice and/or data via a wired and/or a wireless network. Industry analysts place telecommunications in either a Wired or Wireless bucket, using these sub industries as basis for their analysis.For the purpose of our presentation we are defining the Australian telco industry as a domestic market; we will be touching on companies that are part of regional or global compny but our focus will be on concentrating on their presence in the Australian market.Firstly, the wired telecommunications industry is currently declining at almost 9% YoY, where revenues sit at $11.8bn and profit at $2.7bn (Source: IBIS World Report (May 2013)) – a market in our view that is saturated with products where innovation has been lacking for some time. Secondly, the wireless telecommunications industry is currently illustrating a 4.3% growth, where revenues sit at $20.8bn but profit again at $2.7bn Source: IBIS World Report (May 2013)) - where technology continues to advance at a fast rate, facilitating a proliferation of new products and services.Quite simply, we regard this view to be too basic to reflect a very complex and interwoven industry such as the Australian telecommunications industry.but concentrating on their presence in the Australian market only
The Telecommunications industry landscape is changing. We’ve looked at the environment and there are a range of factors that affect the industry. Factors which are of low influence are; Economic: - WIRELESS: Household incomes are increasing and people are spending more money on value added mobile phone features. - ALL: The Australian population is increasing - ISP: Businesses desire for E-commerce business services. Environment:- There is uncertainty about future power costs as the government embarks on removing the carbon tax.- Telco’s and handset manufacturers need to make provision for the disposal of old handsets. Legal:- WIRELESS: Competitors need a spectrum licence with allows operators to provide mobile services within a determined geographic area. - WIRLESS: Companies to acquire a licence from ACMA.- WIRLESS: Competitors to adhere to the guidelines set by the ACCC.- WIRED: ACCC regulation of pricing of line rental access by Telstra and the pricing of mobile phone calls.- WIRED: ACCC sets price of wholesale line rental and unconditional local loop access fee.- WIRED: Industry became self-regulated in 1997 with the introduction of the Telecommunications Act.- ISP: ISP’s providing a fixed line Internet access service must pay Telstra a line sharing service cost.- ISP: Adhere to ACCC guidelines The environmental factors that are going to heavily influence and impact the industry in the future are Political, Social and Technology. Political: - WIRELESS: The Government owns the spectrum and sells it at a determined set price.- The introduction of the NBN.- The NBN will provide faster fixed line wired services, PAYTV, data and international calls.- WIRED Government policies such as the universal service obligation influence the spread of the telecommunications industry. They subsidise services to regional and remote Australia to ensure they have telecommunications access.- WIRED: Legislation will ensure NBN remains Australian owned.- ISP: The NBN will benefit ISP’s due to the speed of the network and subsequently the ISP’s offering. Social:- WIRELES: Generation Y to be early adopters and major beneficiaries of wireless technology.- ALL: Consumes desire for constant connectivity.- ISP: Consumers desire for online entertainment; movies, games, Internet browsing.- 67% of mobile users have a smartphone Technology:- WIRELSS: Consumers are upgrading their 3G phones and broadband plans due to the introduction of digital reader devices and smartphones. - WIRELESS: In the next 5 years there will be an increase of wireless data card subscriptions (eg: Dongles) due to the 4G networks- WIRELESS: Wireless infrastructure enables voice (VOIP), data services, and radio and television relays.- WIRELESS: Smartphone revolution driving wireless growth – mobile applications; online banking, GPS mapping and video streaming.- WIRELESS: New smartphone devices with larger screens allow consumers to watch live feeds (sport / movies), video calling and Internet browsing. - ISP: The NBN will allow ISP to deliver faster products and larger download data limits.- Increase in VOIP and IPTV demand.- WIRED: Faster wireless services (probably porters substitution point), VOIP. Social demand and technological advancements continue to put pressure on new growth. The NBN is also a political / disruption factor. Sources: IBIS World; Wired Telecommunications Network operation in Australia Industry report – May 2013 IBIS World; Wireless Telecommunications Carriers in Australia Industry report – September 2013 IBIS World; Internet Service providers in Australia Industry report – May 2013
PSTN is declining. Coverage and Reliability have been the key success factors. PSTN industry has been a duopoly for over a decade. Most of Australia was covered by the two major players and the competition for market share is primarily between the two major players. The market share of other competitors is almost insignificant.Suppliers: Major operators have built and maintaining their own network on which they provide various services. For smaller service providers, supplier power is high as they are dependent on Telstra/Optus network. For network equipment suppliers of the core network infrastructure, the power is low because market share is controlled by two big players and they have a large number of suppliers to choose from. LOWBuyers: Switching cost is high for businesses using PSTN. The demand has no effect on price due to regulations. Buyers are ‘stuck’ with line rentals, call charges and a low choice of value added services (voice mail etc). In emergencies, fixed phones are believed to be more reliable than mobile phones. A high number of substitutes in the form of VOIP, mobile calls. LOWNew entrants: Other service providers are dependent on Telstra and Optus for the network and therefore overpowered by these big players. A new entrant building their own copper network now is unlikely although there may be attempts to use the profitable model ‘build+wholesale+retail’ by companies with high investment capacity. LOWSubstitutes: Internet and Mobile pretty much make PSTN redundant in many scenarios except in few such as very high reliability requirement such as medical, government etc HIGHRivalry: The rivalry is high between the two competitors but overall rivalry amongst all players in the market was low. LOWIn this picture of the telecom industry, as an established telecom company you may stay in business because of your heavy investment in network but there won't be many new entrants in PSTN with vanilla 'voice call' offerings.There is definitely no growth in this market and although ARPU is steady,overall profits are declining rapidly as customers have switched to other substitutes such as VOIP and mobile phone calls.Profitable for incumbents but unattractive for new entrants
Internet changed the dynamics. If PSTN was about connecting people, internet allowed people to connect and stay in touch in more than one way (emails, messenger, VOIP calls)As the telecommunication companies applied innovation and leveraged their biggest assets, their networks, to provide data connections i.e. the internet. Speed, bandwidth became key success factors. The internet impacted speed of business globally and impacted the telecommunication industry itself. Supply chains, distribution channels were reshaped as internet created new communication channels.Suppliers: Supplier power higher for the network owners such as Telstra and Optus from the perspective of smaller service providers. For the suppliers of network equipment the power decreased further due to globalisation, new designs of components influenced by new software and commoditisation of components. HIGHERBuyers: Buyer power is relatively higher with more choice of internet services, data plans from a wider range of providers from low cost to premium services. Switching internet provider is relatively easy for residential customers but still not very easy for business customers. HIGHERNew entrants: There has been increase in number of smaller new ISPs but a decrease in the number of large-medium size ISPs due to acquisitions.Definitely lower barriers of entry for service provides and a range of services to offer from plain VOIP calling cards to premium broadband or cable connections. HIGHERSubstitutes: There is no real alternative to internet. LOWERRivalry: Increased rivalry as customers switching from big providers to new service providers for better price, better customer service. HIGHERThere are a number of opportunities for new entrants, many options to differentiate on and better chances of survival due to growing market size.
Mobile disrupted. PSTN connected people, Internet provided them many ways to stay in touch and mobile allowed them to be connected at anytime and from anywhere (almost).The major telecommunication companies attempted to supplement but in some instances cannibalised their own PSTN network and fixed line internet by investing in mobile networks and by providing mobile services. The mobility was a great value add to the telecom offering. Mobile technology also opened up the telecommunication industry to whole range of new entrants.Suppliers: Big players have invested in wireless network infrastructure and extended market share by cannibalising their own fixed line products. HIGHERBuyers: Buyer power has increased further putting pressure on price. High churn rate, short product lifecycle is making buyers are demanding more innovation and more new services more frequently. HIGHERNew entrants: Lower entry barriers with more opportunities to target niche market or compete on price. HIGHERSubstitutes: Partial substitutes in the form of free wi-fi zones but with less convenient (need to authenticate with every new wi-fi), high speed fixed internet could challenge high speed wireless network on media streaming type of services but no real substitute for mobility. LOWERRivalry: Higher due to more new entrants and disruptive trends, diversification of computer manufacturers into telco industry – Apple, Google etc, and media companies too. HIGHERMobile explosive growth has slowed down and there is a focus on innovation in high-speed, high capacity network to compete against the challenge of high speed fixed internet. Demand is attractive for competitors – but can limit margins
Speaker Notes:-Government policies and its influences in the industryFor the last twenty years, Australian telecommunications policy has focused on promoting private sector network and service competition at every level and the Commonwealth has progressively sought to exit its remaining Telstra shareholding. However, the Australian Government is now re-entering the telecommunications sector through NBN Co. These things highlight again that political factors and government regulations continue to play an important role in shaping this industry.NBN board had a major restructuring with Mr.Ziggy,who had worked with both Telstra and Optus ,being appointed as the Chairman of the NBN Co. Now with board undergoing a strategic review and analysis of the project, and re negotiating with Telstra for FTTN (Fibre To node) policy, Mr.Ziggy’s leadership skills will be put to test.Speed and bandwidth of NBN will revolutionise the industryProvide opportunities for content providers, TV broadcasters to use NBN infrastructure to deliver all entertainment video content in HD format and interact directly with the consumers. .NBN will accelerate the growth of media content.In home, video phones will begin rivalry with skype and google talk. Ability of resellers to purchase and utilise NBN infrastructure will attract more companies into the market.This will bring in new players to compete within industry.http://www.fool.com.au/2013/10/08/more-customers-joining-4g-ahead-of-nbn-rollout/ConsConsumer/Business Uptake of NBNPolitical issues delaying rollout over an extended timeFor the industry to successfully utilise all benefits of NBN, they must be able to migrate people towards NBN. There must be more applications that require high data usage, which cannot be satisfied by existing systems, hence pushing people towards NBN.the possible disruption in transitioning services and customers to new technologies, the uncertainty around political changes and the complex nature of the roll out over an extended period of time, are all issues that could have detrimental impacts.
OptusOwned and managed by Singtel Group, Optus is the company’s largest subsidiary.Optus includes Virgin Mobile (MVNO) in their portfolio. With 27.5% marketshare (installed base), Optus and Virgin are the 2nd largest mobile network provider in Australia. There current installed base has increased 2pts in the past 12months, although a fall in revenues indicates that ARPU has decreased driven by the hypercompetition and price wars.In terms of share of sales, there is a duopoly for Optus with Apple and Samsung accounting for two thirds of the total business. This indicated strong supplier power, which proves to be difficult for Optus. These companies display ‘bullying’ tactics, which effect the subsidization and profit margin for Optus.The cash cow for Optus is the mobile business unit which accounts for 64% of revenue is driven by the mobile business unit indicating that In FY13 Optus added 306K new postpaid customers adding 2% to their postpaid business YoY. Overall Optus has seen declines in revenue and NPAT YoY. Optus corporate have qualified this loss as a result of operating restructures and group consolidation. After launching 4G network in late 2012, the carrier has seen significant sales of LTE handsets accounting for just under 800K sales (new and upgrades).In May 2013, SingTel put up its Australian subsidiary Optus' satellite business for sale, soliciting offers in excess of AUD2bn (US$1.9bn), in order to help finance its expansion plans. However, the fact that Optus' satellite business operates key facilities for the Australian military is likely to mean that any deal will be subject to close scrutiny by the government.Overall, Optus is focused on driving breakthroughs in customer experience. This is certainly a hygiene factor in this industry, where customer service is a gimme. Singtel made significant improvements to their sales and distribution channel to improve the retail experience for their customers. In Australia, they implemented a new retail strategy that involved rationalising several third-party distribution partnerships which resulted in the termination of the reseller relationships with Allphones and Telechoice. This is a major change for the brand, allowing them to fully focus on core Optus-branded activity, giving them more direct control over the customer experience. Optus is also building networks for digital services having upgraded more than 4,000 3G sites to deliver faster data speeds and more consistent in-building coverage for customers. Thirdly, Optus are capturing growth and revenue from mobile data. Teleco businesses are transforming from traditional carriers of voice services into modern digital businesses. To capture the revenue opportunities driven by the proliferation of mobile devices and customers’ increasing usage of data, Optus introduced simplified mobile data price plans. In addition they also reviewed their handset subsidies, implemented simplified and tiered price plans as well as streamlined bundle offers to improve the yield and profitability of data services and sustain continual network investments. Last year, SingTel went through a significant reorganisation. Twelve months on, the new structure leverages their global scale by establishing shared procurement services, as well as combining networks and IT functions, and offering digital initiatives. They still continue to explore opportunities for additional savings by including their regional mobile associates in joint procurement arrangements for items including handsets and network infrastructure. It is evident that Optus is focused on the core customer experience to defend the base.
VodafoneMajor strategic backing from UK’s the Vodafone Group (50%) and Hong Kong’s Hutchison Whampoa (50%). Includes Crazy Johns (MVNO) in their portfolio.In June 2009 it was announced that Vodafone Australia has been acquired by Hutchison Telecommunications in an effort to expand their marketshare and network profile. The company is known as VHA, however consumer facing brand is Vodafone Australia.Both networks now continue to operate under the one brand with 3 Mobile was officially ‘turned off’ in August 2013 with all remaining customers migrating across to Vodafone.Vodafone has 18.9% marketshare with massive declines YoY. Since the start of the year, Vodafone has seen 550K customers church representing a service revenue loss of almost $300M.Vodafone has seen huge churns in their customer base driven by their network issues and lack of investment into their service infrastructure. Former CEO Nigel Dews was held responsible for the decline in their marketshare and in 2012, Bill Morrow will brought into the organisation to take over the reigns of this struggling organisation. Bill is recognised as one of the global telecommunications industry's most experienced executives. He is the former Chief Executive of Clearwire Incorporated and was previously Chief Executive of the Pacific Gas and Electric Company. He is a former Europe Chief Executive with Vodafone Group and has run the Group's businesses in Japan and the UK. He, together with a new leadership team are tasked with changing the business’ course. They endeavor to meet this challenge through a blend of product improvements, internal realignment, stronger customer engagement, consistency in communication, and brand smarts.As a leader, Bill is said to be approachable and encourages open communication two-way communication with the team. He defines his turn-around strategy as being built from the bottom up with the customer at the core. Since his appointment there have been three major restructures, with over 25% of their workforce made redundant. Overall, Vodafone continues to invest in programs to stop the bleeding of their base. Accelerate network upgrade and expansion plans said to be worth $1B over 2 years to combat connection issues that continue to plague the carrier. This is continually supported with heavy marketing investment to repair the brand’s image. Vodafone also launched a ‘money back guarentee’ offer, where customers can cancel their contracts if they weren’t satisfied with their network coverage.Launched 4G LTE Service in June 2013, almost two years behind Telstra.Continue with integration of Vodafone and 3 Business Units – Operational Consolidation including retail stores, network and operations.Engage is aggressive cost cutting efforts including the closure of their MVNO Crazy Johns.Consolidated contact centre to Mumbai and HobartWhile VHA has tried to quickly resolve its network issues by overhauling its infrastructure, the operator has yet to demonstrate a clear strategy to prevent further customer churn.