Where will Vodafone’s NBN customers come from?

Alex Kidman 24 October 2016

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Research indicates that a lot of Vodafone’s mobile customers are already willing to switch ISPs.

The news that Vodafone would offer NBN services in 2017 was not too surprising. The NBN can be sold by any provider, making it attractive to the only one of the three big telcos not to currently offer fixed line broadband services. It equally doesn’t take much crystal ball gazing to suggest that Vodafone is highly likely to offer bundle packages of mobile and broadband services, or at the very least discounts for customers who opt to have both sets of services at once.

But Vodafone has to compete with every other NBN-ready ISP for customers, so the next question becomes where it gets its customers from. According to research from Roy Morgan, if you’re already a Vodafone Mobile customer, the odds are pretty good that by the time Vodafone actually switches on its NBN deals, you’ll be ready to jump ship from your current provider.

Vodafone’s current subscriber base of around 3.5 million Australians, but according to Roy Morgan’s research, only 2.5 million of those customers already have a fixed line home service. While Telstra dominates the home broadband scene in Australia, Vodafone customers are less likely to have a Telstra broadband service, with only 22% of the customer base opting for Telstra as their ISP, compared to the 32% national average. You’re just as likely to have an Optus ISP service, though, with 12% of respondents opting for broadband that way.

Vodafone customers are twice as likely as the national average to have their service through TPG, with 12% of respondents indicating them as their ISP. TPG also picks up a further 8% of the customer base via its ownership of iiNet and other subsidiary ISPs.

That’s a competitive field by itself for Vodafone to take on, but the research suggests that some 550,000 of its customers are already intending to switch ISPs in the next 12 months. 22% of the group that already have fixed line services are likely or fairly likely to switch, citing dissatisfaction with their current ISP as the core reason to switch. As to what’s likely to entice them, 35% would like cheaper rates, 25% would like better network coverage or reliability and 21% would like clear plan pricing. We'll await with interest details of Vodafone's plans to see how well they match those criteria.

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