If Guy Laurence, head of Vodafone’s UK business, is concerned about falling behind in the race to offer 4G phone services, he hides it well. Indeed, he appears more preoccupied by an alarm that goes off in the group’s Newbury control centre, where network quality is being monitored – right down to the sending of individual texts across more than 200 countries, according ft.com. Ahead of a briefing with senior managers on Thursday, Mr Laurence plays down fears that Vodafone could be outpaced by EE, the joint venture of Orange and T-Mobile that will next week launch the UK’s first 4G network. Some analysts had suggested that high spending iPhone customers could decamp to the rival group, which – having gained permission to reuse spare network capacity for a 4G service, rather than wait for a bandwidth auction next year – now has a six month head start on Vodafone and others.
"People need to understand that there are different sorts of 4G," argues Mr Laurence, before launching into an explanation about the effectiveness of the bandwidths used to broadcast mobile signals.
He says that the sort of low-frequency 4G network that Vodafone wants to build will work better indoors than networks using other bandwidths – allowing the company to fulfil a promise of providing indoor coverage for 98 per cent of the UK.
"Only 98.4 per cent of the UK has running water," Mr Laurence notes proudly, comparing the Vodafone network to a "deep pan" pizza, rather than the "thin and crispy" ones run by rivals. "Indoor coverage is very important. We want to build our network on that. There is a difference between being at the leading edge and the bleeding edge."
Mr Laurence declined to comment on the pricing of EE’s 4G service, which has come in for some criticism for its data costs, but said Vodafone’s service would also be charged at a premium.
To create the network, Vodafone will need to buy low-frequency spectrum at the long-awaited 4G auction in January.
An industry-wide battle with telecoms regulator Ofcom about auction rules was settled last month with a promise to bring forward the date from which the spectrum could be used.
Mr Laurence says that the way the auction was handled was "naive", pointing out that how quickly the spectrum could be cleared for use was always going to be key. Vodafone, along with O2 and Three, will now be able to join EE in the 4G market by next spring.
Mr Laurence expects that most customers will wait until then, barring an initial wave of early adopters.
Vodafone aims to encourage them, by promising to buy customers out of their contracts at 70 per cent of the cost, if they will upgrade to 4G next year.
"The public will pick [4G] up when it works," he says. "The average customer changes contract every two to two-and-a-half years. Currently, there are not many 4G handsets. In a year, there will be a lot. We will place it in the hands of the customers."
Crucial to Vodafone’s plans has been the £1bn acquisition of Cable & Wireless Worldwide, which has provided access to a 20,500km fixed-line network that can carry calls to its masts for transmission.
While there are cost savings from the acquisition – cash flow synergies are forecast to be £150m-£200m a year by March 2016 – Mr Laurence says the main advantage will be the guarantee of network quality. There will be "an Olympic lane" for Vodafone customers, he says. "We are the only [mobile] network with a fibre network."
Mr Laurence is confident that the quality of the Vodafone network will be a selling point. A test 4G commercial network set up in its Newbury HQ, using the 800mhtz spectrum, has achieved speeds of up to 68 megabits per second (mbps) – 10 times faster than the average home broadband, even if these conditions are unlikely to be replicated in practice.
Indeed, most consumers would struggle to know what 4G means – which is why there will be months of marketing from all companies planning to enter the superfast mobile market. The fight about the 4G auction may be over but the battle for paying customers is only just beginning.
