Mobile operator to recruit more sales staff as it focuses on data services.
Vodafone it is to cut 20% of its U.K.-based management staff as part of a broader scheme to streamline its operations and boost mobile data sales.  

The U.K. mobile operator announced on Tuesday that it will make a total of 450 redundancies at its Newbury headquarters as it seeks to simplify its operating model, but it will take on additional sales staff in other areas of the business.

A Vodafone spokeswoman told that the management cuts are all being made at middle management level.

“We want to re-focus our business on our customers rather than what we’re doing in the background,” she said.

At the same time, the operator is hiring more staff across its consumer and enterprise divisions in a bid to drive sales of its mobile data products.

“Vodafone UK is clearly focused on building on its market leading position in data products and services. Today we are announcing a series of targeted investments to meet growing demand in this area,” said Nick Read, CEO of Vodafone UK, in a statement.

Under the plan, Vodafone is creating 130 sales and services roles in its enterprise business, and hiring 330 employees to work in its retail stores advising on and selling data products.

“Customers need a greater understanding of what they can do with their phone – they’re not always aware of what it’s capable of,” said the spokeswoman.

She explained that by hiring extra retail staff Vodafone will be able to offer customers better in-store advice on its mobile data products.

“This is something we haven’t always been able to do when our stores have been busy,” she said.

Tuesday’s announcement is indicative of a wider reorganisation of Vodafone’s operations, according to Ovum senior analyst Steven Hartley.

“Vodafone is shifting emphasis away from centralised management, not just in the U.K., but at group level, and putting more personnel on the front line,” he said.

The mobile operator is also creating a further 30 roles to work on its online sales, customer services and e-billing operations, and building a new customer service centre that can host a further 850 employees.

Flat-rate data offer not on horizon
Vodafone declined to comment on Tuesday on whether its shift in focus to mobile data products is a forerunner to the adoption of unlimited flat-rate data plans, as a number of its rivals have done.

O2 unveiled a flat-rate data plan, albeit subject to a fair use policy, with Apple’s iPhone, and subsequently extended the tariff to all of its pay monthly of contracts, for example.

“I don’t think today’s announcement leads directly to un-metered access,” said Ovum’s Hartley.

“If you want to succeed in mobile data services then tariffs do need to be simpler… it’s one of the elements, but Vodafone is not likely to be that aggressive. They’re seeing mobile data growth at the moment without introducing unlimited data,” he said.

Indeed, in its fiscal third quarter Vodafone Group generated data revenues of £558 million up 42% from £368 million a year earlier.

Hartley warned that the introduction of flat-rate data in the ultra-competitive U.K. mobile market would be a risky move, since it would likely drive down data prices rapidly, leaving companies like Vodafone unable to offset declining voice revenues.

“Nobody wants to end up a bit pipe – no-one more so than Vodafone,” he added.

And CEO Arun Sarin is well aware of the risks. At last month’s Mobile World Congress he once again warned that mobile operators need to bring Internet services to life, or risk becoming bit pipe providers.

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