Vodafone invests €250M to boost B2B offerings
Vodafone is spending €250 million (US$273 million) this financial year on strengthening its B2B unit, with a focus on services such as cybersecurity, cloud, productivity, connectivity and IoT, which the operator said already account for every second order at Vodafone Business.
Luca Mucic, Vodafone Group's CFO, alluded to the investment in a B2B transformation program (called Spark) during the recent earnings call for the first quarter of the financial year ending March 31, 2025 (Q1 FY25). Vodafone further clarified that the Group is re-allocating a €250 million investment to support new Vodafone Business products and managed services capabilities.
Vodafone Germany has especially welcomed the move as it seeks to exploit what it sees as significant growth potential in more advanced corporate services that go beyond traditional fixed and wireless connectivity offerings. This drive will also see it appoint 120 "experts" who will provide the required experience in the different areas.
A Vodafone spokesperson also noted that the 120 new roles in Germany are part of a group plan to recruit over 400 dedicated new roles in Vodafone Business this year to support the offer of new digital services. They join a unified global business team comprising more than 12,000 employees worldwide, the spokesperson added.
Getting down to business
Meanwhile, Vodafone Germany is also gaining a new managing director for its B2B unit in the current financial year: Hagen Rickmann, who served as managing director (MD) of business customers at Vodafone rival Telekom Deutschland until October last year, will take over as B2B MD at Vodafone Germany on March 1, 2025. Zoltan Bickel is acting head of corporate customers until then.
Rickmann will in fact have a dual role at Vodafone. He is joining Vodafone Group a few months earlier, in November 2024, and as the group’s new business director, he will be responsible for the corporate customer business in Germany, Albania, the Czech Republic, Greece, Ireland, Portugal, Romania and Turkey.
In this role, he will report to Marika Auramo, the newly minted CEO of Vodafone Business. For his role as B2B MD in Germany, he will report to Vodafone Germany CEO Marcel de Groot.
Vodafone Business currently has a workforce of about 1,300 people in Germany and said around 850 of them are receiving training in artificial intelligence, cloud computing, and cybersecurity.
As noted by Bickel, "customers already want more than just SIM cards and landline connections. Every second order we place is for one of our Beyond Connectivity services. And demand continues to rise. In order to provide our customers with the best possible support on their digitalization journey, we are therefore strengthening our Vodafone Business team."
Vodafone's overall B2B push comes at a particularly fraught time for its German unit. Vodafone has admitted, for example, that it expects to retain just 50% of its 8.5 million multi-dwelling unit (MDU) households amid the fallout in changes to German TV laws.
Speaking during the earnings call for the financial year to March 31, 2024 (FY24), Mucic said FY25 will be a "transitional year" for Vodafone Germany. While underlying growth is expected to remain positive in the year to March 31, 2025, this will not be enough to offset the "MDU headwind," he said.
In FY24, Vodafone said Germany returned to growth with service revenue increasing by 0.2% for the full year and 0.6% for the fourth quarter, although adjusted EBITDAaL declined by 5.8% owing to higher energy and other inflationary costs. However, in Q1 FY25, service revenue in Germany decreased by 1.5% primarily due to the impact of the MDU TV law change.
Editor's note: An earlier version of this story incorrectly stated in the headline and story that Vodafone Germany was making a $250M B2B investment. We changed the story to reflect that the B2B investment figure should have been attributed to Vodafone Group, the parent company, not just the German subsidiary.
