Vodafone UK comes out fighting with a 70% discount contract offer for customers upgrading to 4G

No wonder Vodafone has been smiling politely along with it’s other maligned competitors whilst Everything Everywhere has been hogging the 4G limelight.

They’ve been hatching an inspiring offer that will, I suspect, create significant havoc for the competition.

Have a read of this press release that just hit my inbox:

Vodafone is launching its 4G phone promise, giving customers the confidence that they will be among the first to benefit from ultra-fast 4G when it launches next year. Customers can simply bring an eligible phone into any Vodafone store and if they are still in contract, we’ll knock 70% off their remaining contract charges, giving them a 4G device and getting them up and running on ultra-fast 4G.

Vodafone is offering customers who have bought certain handsets such as the Samsung Galaxy S III* or Galaxy Note II [or the iPhone 5 — Ewan], a simple way to get ultra-fast 4G when Vodafone launches it in Spring 2013.

Provided a Pay monthly customer has been with us for at least three months, they can come into a store and ask to switch to ultra-fast 4G. We’ll take back their old phone, knock 70% off their remaining contract charges and give them a new 4G phone and a new 4G contract. The 4G promise is available until 31 December 2013 for Pay monthly and small business customers.

To find out more about the Vodafone 4G phone promise visit www.vodafone.co.uk/network or visit one of Vodafone’s stores.

Improving our network today and getting ready for tomorrow

Vodafone spends more than £1.8m every day on our network to make sure our customers continue to get the speed and service they rely upon. As part of our preparations for ultra-fast 4G, we’ve been upgrading our network as we target 98% of the UK population with indoor coverage by 2015. We’re also continuing to invest in our 3G network coverage, delivering faster speeds in more places through HSPA+ and HSPA-DC.

We’re upgrading the connections between our masts and our core network, helped by the acquisition of Cable & Wireless Worldwide earlier this year. That deal brought us 20,500km of fibre across the country, more than any other mobile network owns. It’s easy to forget that a mobile network relies on fibre to move data across its network so having our own gives us greater control over the quality of our service.

No network can operate without a ‘core’ or brains’ of the network that routes every call, text and internet session made by our customers and keeps all of the services that people use on their mobiles up and running. Vodafone has a state of the art core, having already consolidated our 2G and 3G core networks.

– ends –

Notes to editors

Handsets eligible for the Vodafone 4G phone promise can be found at www.vodafone.co.uk/network

*This offer applies to Samsung Galaxy SIII handsets purchased on or after 26 Oct 2012

** You must trade in your 3G handset in good condition, or we’ll have to add on something for the damage.

Customers need to pay the remaining 30% contract charges when they take out this offer.

Vodafone 4G phone promise isn’t available to customers on a price plan where the allowance is shared between users.

The Vodafone 4G phone promise is subject to a credit check and the customer taking out a minimum-term 4G contract with a 4G handset on an equivalent or more valuable price plan.

This is super offer for anyone who’s been umming and ahhing over Everything Everywhere’s rather exciting 4G razzle dazzle. It’s highly tempting — especially for any geeks out there.

Vodafone is basically saying words to the effect of “Don’t worry. Sign up with us and when 4G’s available, we’ll sort you out.”

I think this will be tremendously reassuring to a lot of people who were previously looking at the greener grass over at EE. I can imagine a lot of people will be incredibly relieved to be presented with an alternative, especially if you were thinking of going through the rigmarole of swapping numbers.

There are a number of things to consider, not least what Vodafone’s 4G pricing offer will actually look like. It’s also not entirely pain free. Here is an example of how I think things will work, based on this release.

Assume you take out a £51/month 12-month contract for a Galaxy SIII this month.

Assume that by March, Vodafone are in a position to launch.

Assume that 4 months will therefore have passed by the time you walk into the Vodafone shop get kitted out for 4G.

You have 8 months left on £51/month. That’s £408. Vodafone will dump 70% of those charges — £285.60, leaving a balance of £122.40.

You have to give Vodafone back your Galaxy SIII in good condition.

You need to pay £122.40. That could be quite a sticking point. But then one would hope the lure of 4G might be enough to erase that pain. Or, if Vodafone are smart, they’ll do some jiggerypokery in the background to make sure that the £122 you have to pay means your 4G phone is free provided you take a 24-month contract. Something like that.

(In this example, if you were to wait until May before actually doing the upgrade, you’d have 6-months (£306) outstanding. Vodafone would swallow the 70% (£214) leaving you with £91.80 to pay.)

There is a significant risk, of course, that customers thinking about EE will do the sums and wonder why they’re having to bother paying off the 30% to Vodafone in the first place. But don’t forget this is probably to ensure Vodafone doesn’t make a total loss on the hardware portion of the contract.

Fundamentally, Vodafone is making sure that anyone thinking about moving now has pause for thought.

I’m excited to see movement from Vodafone. I can’t remember seeing this kind of informal and very direct language (“we’ll knock off 70%”) from the company before. It’s rather refreshing and I think customers will react to it positively. I’d really like to see more of this kind of approach from the operators.

What do you think?