Vodafone chief sends strong signal about mobile market

Anne O'Leary is not one to back down from a challenge. The chief executive of Vodafone Ireland is also a regular on the triathlon scene, with her latest achievement coming only a matter of weeks ago when she took part in a half ironman competition in Majorca.

But these days, she says, she participates rather than competes. That’s partly due to her busier schedule since taking over the helm at Vodafone Ireland last year, at a time when telecoms companies are facing increasing competition and a shift in the market.

But exercise is still a big part of her routine. Before work every morning, O’Leary puts in an session at the pool, saying exercise is what keeps her thinking clearly.

“Health, fitness and wellbeing and very important to me. Triathlons for me are a goal. I do it because I enjoy them,” she says. “You need to be energetic as a chief executive.”

It also has a corporate link; Vodafone Ireland sponsors Triathlon Ireland, and some of the company’s Irish workforce have begun to take part in the sport. It also provides O’Leary with the opportunity to test the network at various locations around the country, mixing a little business with pleasure.

O’Leary certainly is breaking the mould. She is the first native Irish CEO the communications firm has had, a major achievement for both her and the company.

“It’s a bit like if you do your first marathon and you get over the finish line and you think, ‘I did it’, and you can’t believe it. When you think about it, you’ve done the training and followed the programme,” she says.

“When I got the call to say I got the job I was obviously delighted, and a bit surprised, running over that finishing line. But when I thought about it, not only had I done five-and-a-half years of delivering for Vodafone, I had put in the training.”

O’Leary was the only Irish candidate considered for the position; her rivals were all from overseas.

Previously head of the company’s enterprise unit, O’Leary came from a telecommunications background, but in the fixed- line business. After working with BT, she moved to Vodafone in 2008 to take over the company’s enterprise business.

Under her watch, the firm boosted its fixed-line offering and moved more into convergence, offering its customers a mix of mobile and fixed-line services.

In the past few years, it has bought Perlico, some of BT Ireland’s assets, Interfusion and Complete Telecom, a major player in the public sector here. That added to the acquisition of Cable & Wireless on a global basis.

It’s all part of Vodafone’s strategy to transform itself into a total communications company, a path it has been on for about five years.

“I knew I was the only Irish person, but I didn’t know who I was up against,” she says. “All you can do then is your best. I had a proven track record of success. We have a very successful enterprise business and I had outperformed the market.

“I had a good reputation from a leadership perspective, which was important. I was seen as ambitious and competitive for the business, and a person who understood convergence and had delivered.”

For the past year, O’Leary has been bedding down the company’s strategy for the future.

“It’s been very rewarding personally for me and I think we’re doing well; we’re outperforming the market,” she says. “It’s been a busy year.”

In Ireland, Vodafone currently has a 2.1 million mobile customers, with a total customer base of 2.4 million.

In its most recent set of figures, mobile customers dropped by 41,000, but there was another trend observed: a marked shift from prepay customers to post-pay, with 500,000 customers now signed up to Vodafone’s Red plans.

“We’re proud of that. We’re outperforming the market,” she says. “The overall mobile market is shrinking. All I can do is try to get the biggest share I can of it. We can make it up by growing our fixed base.

“It was a very strong set of Irish numbers, especially compared to what is happening in Europe.”

Collaborative environment

Collaboration, transparency and simplicity are key parts of her leadership of the company. Unlike many other CEOs, O’Leary doesn’t have her own office or even a designated desk. Instead, she hot-desks like the rest of the staff, moving around the building day to day.

Such an approach means she is more in tune with what is going on with the company.

“We’re completely open plan. The reason for that is for me it was about improving communication and collaboration. It’s about teamwork. Everything we do is very cross-functional. It’s mobile, it’s fixed, its customer care, it’s network. You have to work right across different functions.

“The feedback I get from people on the ground is that it’s a much more collaborative environment to work in,” she says. “I enjoy it. I think I’d be quite lonely in an office now.”

At the last count, Vodafone Ireland employed more than 1,100 people in the State, and in March it announced plans to increase that figure by 113. The jobs will be in technology and networks, customer service, HR, finance, sales and marketing, with about half of those roles as permanent positions.

The jobs are part of a major nationwide network investment to meet increasing customer demand for mobile, broadband and data services.

Vodafone was the second of the networks to begin rolling out 4G services to customers – Meteor was first out of the blocks – but O’Leary says it didn’t faze the company to be beaten to the punch by its rival.

“It’s not about ’first’. We wanted to wait until we had more extensive coverage,” she says, adding that it was important to deliver the service people expected.

It also took the slightly different approach of rolling out the services in the southeast first, with Kilkenny the initial launch site, rather than the typical urban centres of Dublin, Cork and Galway.

The usual suspects followed, of course, and Vodafone has also been improving its 3G network around the country, switching UMTS 900 services on in areas where there was previously only 2G voice coverage.

Vodafone is also gearing up for the future, with plans to roll out advanced LTE to customers early next year. That will boost speeds even further from the current LTE, or 4G, standards, by more than three times.

A demonstration of the technology at Vodafone’s headquarters showed just how fast the network could be, registering speeds of between 170 and 180mbps consistently, with a theoretical top speed of 225mbps. In the real world, that means a user could download a high-definition movie in a couple of minutes on their mobile.

The equipment capable of utilising the new technology will be hitting the market towards the end of this year, and Vodafone is poised to make it available to consumers early next year. In the meantime, it will be trialling the network with customers until the end of the year.

The company was also named by the ESB as its preferred partner for rolling out a new fibre network around the State, a project that is still being finalised.

O’Leary says its total communications strategy will also focus on consumers, and it has started to work on developing more content partnerships.

“We launched Spotify last Christmas, and we have other negotiations in terms of where we’re going on that.”

The Irish arm could also benefit from the recent Verizon sale, which frees up some cash for investing in the business. It raised $130 billion (€95 billion) for the Vodafone Group, which is expected to be ploughed back into improving its network.

But while the sale may have been of benefit financially to the firm, it also caused a few problems, namely in how it was handled by registrar Computershare with regards to Irish shareholders. Although the sale returned more than €600 million to shareholders here in a mix of cash and shares in Verizon, there was also considerable confusion about the return of forms from stakeholders indicating how they wanted to claim their money. Some shareholders, despite posting the documentation in plenty of time, were told that it had arrived after the deadline, leading to unwanted tax bills and a financial impact for them.

Although Vodafone Ireland itself wasn’t directly involved in the sale of the shares, its name was attached to the deal, meaning that any negative publicity as a result could have reflected badly on the firm.

“Obviously, I would have preferred if it was handled better,” she says. “I regret it was a horrible experience for people.”

But O’Leary says that the majority of people were understanding and despite expectations, there wasn’t too much of a backlash on the Irish subsidiary.

While it is planning its own assault on the market, its rivals aren’t exactly sitting back either. Vodafone will face increased competition in the coming months in mobile from rival 3 Ireland, now that its merger with O2’s Irish subsidiary is going ahead.

Further details will be released in the coming week, but on Wednesday, European regulators said the deal, which is worth up to €850 million, could go ahead. That will catapult 3 Ireland into second position in the market, behind Vodafone, and hopefully stem the losses incurred at the Hutchison Whampoa-owned firm.

Comreg has already weighed in, criticising competition remedies accepted by the European Commission as “inadequate”.

“We are also concerned that the merger will be bad for competition and investment in Ireland and would urge Comreg to use its legal powers to address these issues,” O’Leary said.

Growing the company in fixed-mobile convergence is also high on her list for the coming months. Vodafone Ireland plans to invest €550 million over the next three years in its mobile network, converged IT platforms and fixed network and services.

"We want our consumers to be able to enjoy and connect in the way they want in their lives. Our purpose is about that. If I do that in five years' time, I'll be a very happy person." CV: Anne O'Leary Name: Anne O'Leary Age: 46

Position: Chief executive, Vodafone Ireland

Family: Married

Something you would expect: She believes that convergence is the future of Vodafone’s strategy.

Something that might surprise: She is heavily involved in triathlons, although these days it's more about participation and less about competing.