Vodafone Global Enterprise to Fortify U.S. Presence Via T-Mobile MVNO Deal

Intelligence Report

Vodafone Global Enterprise to Fortify U.S. Presence via T-Mobile MVNO Deal

December 16, 2014

JJ Summary Event Summary December 16, 2014 -- Vodafone Americas announced an MVNO partnership with T-Mobile USA to provide 900 of VGE’s MNC customers with U.S. mobile connectivity. The deal will enhance Vodafone’s Kathryn Weldon global service portfolio, leveraging access services across fixed and wireless technology and including the Current Analysis Principal Analyst, operator’s managed mobility, converged OneNet UC services, and global M2M offerings. It will add to Enterprise Mobility Vodafone’s wireless footprint and also complement Vodafone’s growing fixed global network expansion. Services Service launch will be in the fall of 2015. Quick Take

Competitive Positives • Shores up VGE’s global proposition by adding U.S. mobile access without the need to build out its own network. • U.S. mobile connectivity is key both for global B2B/B2E and for M2M deals. • Immediately targets 900 of VGE’s MNC customers – 400 headquartered in the U.S. and 500 with U.S. operations. • Threatens U.S. providers, especially AT&T and Verizon, as Vodafone can provide a strong international wireless proposition for MNCs. • Possible opportunities for Deutsche Telekom, which still owns T-Mobile USA. • Huge boon for T-Mobile USA, which has not pursued large enterprise and MNC revenues. Continued

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Competitive Concerns • T-Mobile USA alliance may threaten existing MNC deals made jointly between Vodafone and other U.S. operators, especially Verizon. • MNCs with a strong U.S. presence may want more than an MVNO (or prefer an alternate U.S. operator) to support their national mobile and value-added services. • Details still need to be worked out as to organizational structure, management and control, service delivery, SLAs, equip- ment sourcing, customer support, and the timing of new services. • Deal may be confusing/worrying to existing FreeMove or joint DT/T-Mobile MNC customers.

JJ Analytical Summary Perspective: Positive Positive on Vodafone announcing an MVNO partnership with T-Mobile USA, as it will soon be able to ‘virtually’ add the U.S. to its global footprint, less than two years after selling back its stake in Verizon Wireless to Verizon Communications. Vodafone should be able to expand its relationship with many of the 900 existing VGE MNC customers that are in the U.S. or have U.S. operations. These MNCs are likely to require U.S. mobile connectivity; Vodafone is separately addressing its MNC customers’ U.S. fixed network needs through its build-out of wireline networks across the Americas, which was announced earlier in 2014. Vodafone Americas mobile connectivity will be available in 2015 to support not only access, but also more lucrative value-added services, from UCC to managed mobility to M2M.

Vendor Importance: Very Positive Very high to Vodafone, as it continues its global expansion and its quest to become a ‘Total Communications’ provider. In spite of its former 45% stake in Verizon Wireless, Vodafone still missed out on some lucrative MNC engagements that in- cluded the U.S. The MVNO relationship still needs the details worked out; T-Mobile is still building out 4G and has lacked the enterprise/MNC skillsets required to engage meaningfully in the global market, despite its ownership by Deutsche Telekom and its membership in the FreeMove Alliance. Vodafone will offer its own services and tariffs, with T-Mobile USA essentially providing network access. Clearly, this partnership will be lucrative to both parties.

Market Impact: Very Positive Very high on the global enterprise communications market, as existing Vodafone partners in the U.S. and its competitors abroad will rightfully worry about the ramifications of having such a strong global service provider courting MNCs in the U.S. with mobile, fixed, and converged service offers. Vodafone’s ability to offer wireless directly and through its partner network across more than 50 countries may be compelling for enterprise accounts that prefer to bundle their contracts. The deal also may revive questions over Deutsche Telekom’s long-term direction for T-Mobile USA; the U.S. cooperation sidesteps the wireless rivalry between DT/T-Mobile and Vodafone in Europe.