Reach Mobile Service

“It’s a big step and will be analyzed in detail.” Francisco Roman, chairman of Vodafone, made the remarks when he met a few weeks ago the decision to movistar, its highest competitor, leaving the mobile subsidy model to attract customers through portability.

In addition, this manager also added in relation to this matter: “What in good times was valid, no longer works.”

And Shameel Joosub, CEO of Vodafone, said at the time: “The period of amortization of the terminals is very short and prices continue to rise.”

At these words the sector was assumed that Vodafone was going to take a decision similar to that of Telefónica and it will be soon, according to known movilonia.com by an internal source of this operator.

The exact date in which Vodafone will officially announce this measure is not defined yet, but will be within a few weeks.

It shuffles the April 1, which is the day that begins the fiscal year of this company, but could be delayed for a few days later.

“Cheating will lead to an impasse”
The situation is not surprising as the president of the Spanish subsidiary of Vodafone, Francisco Roman, comes long argued that the current model is unsustainable subsidies.

In September 2011, during the XXV Meeting of Telecommunications held at the University Menéndez Pelayo, this manager said the grant smartphone “is a trap that will lead to an impasse,” and also said that “ballasted weight the income statement. ”

Last year the 3 major carriers (Movistar, Vodafone and Orange) allocated 1,600 million euros to commercial practice, representing about 25% of the costs of these companies and represents about the same amount allocated to the deployment of their networks.

Fall in revenues
Vodafone’s accounts in Spain show a significant deterioration in the fiscal quarters.

According to information provided by the company itself about the last quarter of 2011, income from services show a decline of almost 9%.

Under these circumstances, Vodafone has had to raise a number of cost containment measures that affect the whole staff, consisting of more than 4,000 direct employees in Spain.

Among other measures, the company will hold a temporary ERE 2 weeks and cut the variable pay by 10%.

Longer residence commitments
Moreover, in order to maximize subsidies smartphone Vodafone decided to lengthen the periods of commitment to stay.

From February 1 to receive a terminal that has a financial support of this company is to accept a contract for 24 months.

Furthermore, since Vodafone chains periods to its customer base, so that in some cases are tied to 36 months.