Vodafone Group Plc has sold more than half a million third-generation (3G) mobile devices in Germany and they are proving more lucrative than less sophisticated phones, the cell phone operator said on July 14.
3G devices, which offer mobile customers high-speed Internet access, good quality video, music and picture services, account for just 1.5 percent of German customers. But they are already generating 4 percent of sales, Vodafone Germany's incoming chief executive told an analyst and investor day in Germany.
"(3G) is not only a must because it will give us the next step change in innovation and future revenue growth - for us it's already a very good business today," said Fritz Joussen, designated to become the key unit's chief executive in October.
British-based Vodafone, which like its rivals has spent about 8 billion euros ($9.8 billion) on a 3G wireless licence in Germany, said the unit has sold 411,000 3G phones and 117,000 3G laptop data cards since launching 3G services last year.
After years of delay in launching the new services and hundreds of billions of euros spent on licences and new networks across the continent, European companies have been cautious about predicting customer take-up and likely revenues.
Vodafone, the world's largest mobile phone company by revenue, has said it expects to win 10 million 3G customers by the end of March 2006, with about 5 million in Europe and 5 million in Japan. Its German unit - Vodafone's largest division - has 27 million customers, narrowly trailing market leader Deutsche Telekom's T-Mobile. A T-Mobile spokesman declined to provide comparative 3G customer data.
Vodafone said the business customers who tended to use its high-speed 3G laptop data cards bring in 70 euros in revenues per month, almost twice as much as users of slower data cards.
For the rest of the year, Joussen said Vodafone Germany would focus on promoting 3G and its new Vodafone Zuhause (Vodafone At Home) product, designed for customers who want to completely replace their fixed-line home phone with a mobile.
British-based rival O2 Plc's German division has been selling a similar product called Genion for many years, which has helped it gain much higher revenues per user than other German operators.
Vodafone Germany said one of the most popular 3G services to date was mobile television, which it launched in November 2004. It offers 15 channels on-line and four live channels and is used by 100,000 cell phone customers, the group said. The company's 3G network now covers 1,200 German towns and cities and around 60 percent of the population. It expects to cover 70 percent of the population by the end of March 2006. Vodafone shares were trading 0.52 percent higher at 144p in afternoon trade in London.
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