Telco giant Vodafone has bowed to public pressure, announcing that it will carry out a $500 million upgrade of its mobile network after thousands of customers complained and started a class action against the company due to poor network performance.
The admission comes during a troubled time for the company after the Privacy Commissioner last week found the firm had breached the Privacy Act after passwords for databases that held crucial customer data were leaked.
VHA announced yesterday it was sorry for infrastructure problems that plagued customers last year, admitting that customer growth had been too fast and that the company could not upgrade its networks as quickly as it would have liked.
“Your experience has not been what you were expecting from us … I am sorry for this and apologise personally and on behalf of everyone at Vodafone,” chief executive Nigel Dews said in a recorded statement yesterday.
The admission came after thousands of customers said they experienced slow download speeds when they should have been able to browse the internet and access other broadband-enabled services much more quickly.
A class action was launched, with customers saying they experienced slow download times, even slower waits for customer service and encountered technical staff who could not solve their problems.
VHA said yesterday it has added 300 customer care representatives and analysts welcomed the announcement.
Telsyte analyst Chris Coughlan says the upgrade will be less risky due to using only one vendor and says new base stations will be less power hungry, which will save on long-term costs.
“They’re getting a clean sheet of paper here. Previously they had multiple vendors and now they only have one, which will help tremendously,” Coughlan says.
“The new upgrade will be less risky and won’t cause them some long-term issues that using multiple vendors could have.
“The most important thing is that this gives them a more modern platform going forward with new smartphone technology becoming more popular.”
VHA announced yesterday it will upgrade all of its 2G and 3G equipment with new broadcasting technology.
“I’d like to thank our customers for giving us such detailed feedback on our network over the last few months,” Dews said. “We’re now using our customers’ insights and recommendations to improve our network performance.
“We’ve got a lot of work to do but we have a very clear picture of what needs to be done. We start immediately so many customers should start to see and experience real improvements in the network.”
Engineers will upgrade the areas with highest demand first as part of an upgrade plan that will take about 18 months.
More than 5000 base stations will be replaced, with some of them to use technology provided by telco equipment provider Huawei.
That newer standard has a maximum theoretical download speed of 42Mpbs. Huawei Australia chief technology officer Peter Rossi said in a statement the upgrade will allow “cutting edge mobile speeds”.
The new equipment will replace some older equipment manufactured by Ericsson and Nokia-Siemens.
Coughlan says while the initial expenditure is quite high the extensive upgrade will future-proof the company with regard to power expenditure and a possible upgrade to 4G.
“The newer generation base stations are much more power efficient, they’re a much more efficient design in the past,” he says.
VHA said the technology being installed in some base stations will be capable of broadcasting LTE (4G) signals and Coughlan says that will set VHA up as a dominant player in the telco market for years.
“VHA are the richest carrier as far as spectrum goes. They have the assets of both Hutchison and Vodafone … this leaves them well-prepared,” Coughlan says.
The Australian Communications Consumer Action Network welcomed the announcement, saying Vodafone has made an effort to respond to customer demands.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
Comments