Vodafone UK to develop open partner ecosystem as it targets new revenue streams

• Vodafone UK is ready to broker new partnerships to develop new business models and revenue streams
• An open network is needed to unlock new opportunities, according to the operator’s Chief Network Officer, Andrea Dona
• The unit aims to create a ‘one tech team’ culture throughout Vodafone Group’s footprint

Vodafone UK is looking to build a new partner ecosystem that can help it develop new business models and identify new revenue streams, a move that can only be successful if legacy processes and approaches are replaced and a new working culture is adopted, according to senior executives.

Chief Network Officer Andrea Dona (pictured above) discussed the operator’s plans and priorities in terms of network developments during a media and analyst briefing in London this week, stressing that the company is moving away from pure connectivity. 

The journey towards building a new type of business and operational culture involves not only the deployment of digital platforms and creation of new services, but is also driven by “a real desire to create new revenue streams,” something that is common and now increasingly urgent at all operators.

While connectivity is still Vodafone’s “DNA” and the “core” of its heritage, Dona noted a need for the operator to move on from that position and stressed the need to help support its customers to adopt innovative new technology.

“We also have to be catalysts in these new business models – and we want to create ecosystem of partners that help us create these new business models” so that the company improves the customer experience, enables a more efficient time-to-market, lowers the cost base and creates new revenue opportunities, the executive said, noting this all needs to be achieved in the most accessible way possible.

“It’s not technology for technology’s sake – it’s technology that is accessible to all and also very provocative,” he noted.

And while Vodafone has a “long list” of use cases, the ones that will really take off, according to Dona, are as yet unknown.

It seems the only way to find the ones that resonate most with customers is to try them out and see what happens and how services can evolve. For example, Ahmed El Sayed, Chief Information Officer at Vodafone UK, noted that the operator launched an e-commerce platform in Kenya that was initially used for selling vegetables and livestock, so meeting local customers’ needs, but which is now more oriented towards tech products. 

So adaptability and flexibility is important. Here, Dona stressed the importance of standardising the network and making it “software-driven, accessible as much as possible, so that when something comes up, we’re ready for it.”

With that in mind, the Vodafone executive said the operator’s focus in the upcoming financial year will be around opening up the network.

He gave an example with the company’s launch of its first commercial 5G Open RAN site in mid-January, which is in line with a push to “ensure that not only do we create a much needed diversity in our ecosystem of vendors […] but the other thing we want to achieve is to ensure that we create a bit of spark and innovation,” to embrace new entrants and accelerate innovation.

As an example, a more open, multi-vendor network could be beneficial when certain demands and pressures mean new functionality or features may be required. Dona cited the current pressures being put on network operators due to the current hike in energy prices that has “considerably” increased operating costs. 

Today’s option, in this instance, is for an operator to ask its vendors to provide more energy-efficient equipment. 

“Once we got a truly open network, I can go to a very specialist company that is much more focused maybe on energy consumption of the radio, and give me the solution at a much faster rate,” Dona said.

He argued this would also result in a more niche innovation when it comes to security because when a network is open, “you get more specialised people in the various elements that can actually address the security [with a software-based solution] rather than security being in the boxes that are delivered by someone else.”

Asked by TelecomTV to elaborate on this, Dona explained that currently, various elements “get put into a black box by big vendors, and they do a wrap around in terms of security... but have they really qualified the security in every single piece that goes inside?” he asked. 

While he shied away from suggesting that major vendors aren’t focused enough on the security aspects of the elements used in their systems, Dona said that because there are a lot of components and “a security wrap” around them, once it gets unwrapped, “we might find vulnerabilities in the individual pieces”.

Among the other priorities outlined by Vodafone UK is to deliver technologies such as 5G, Internet of Things (IoT) and migration to the cloud but with a “services mindset.”

And to address its vision for new revenue streams, Vodafone needs to “look at what the market wants in terms of services and customise the introduction of this technology in a way that suits their business needs,” Dona highlighted.

Vodafone has realised for some time that all of this requires greater efficiency within its own operations and a greater re-use of internal expertise, so it has been working for some months already on a plan to create a single technical team for all Vodafone operations in Europe so that efforts aren’t duplicated by the teams in each market. (See Vodafone creates pan-European tech team, plans to add 7,000 software experts by 2025.)

“The R&D can be done once, as the lowest common denominator,” that can then be customised slightly to meet the needs of each market and to meet customer needs, noted Dona.  

Of course, all of this still needs significant people power, so Vodafone is still in the process of recruiting up to 7,000 software engineers to develop the stacks that “enables easily-accessible and standard access to the network functions that we’re exposing,” the Vodafone executive said.

- Yanitsa Boyadzhieva, Deputy Editor, TelecomTV