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Vodafone is braced to lose more than 4 million customers across Germany due to an incoming regulatory change. The London-based business will be hit by the end of bulk TV contracts in apartment blocks.
It expects to lose roughly half of its 8.5 million households when the new law comes into effect in July. The shake-up will force companies to strike individual contracts with tenants, rather than negotiating with the housing association that runs the block. In an early trial, Vodafone said 65% of existing customers chose to move to individual billing with the same broadband and TV deal.
Back in the UK, Vodafone has confirmed that its redesigned Power Hub will now be the default Wi-Fi router for all new customers, unlocking improved Wi-Fi 6 speeds and better encryption to all full-fibre customers — something that BT cannot currently match with its Wi-Fi 5-only kit
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German households account for around two-fifths of Vodadone's revenue.
Despite the looming shift in Germany, Vodafone has returned to growth across its key markets as it presses on with a turnaround process and waits for a decision from regulators on a potential merger with Three UK.
The telecoms giant said it was making progress on a restructuring plan which has included selling off its underperforming Italian and Spanish businesses and cutting thousands of jobs. Vodafone said service revenue grew 6.3% to £25.7 billion in the year ending March 31.
In its latest earnings call, Chief executive Margherita Della Valle said Vodafone's proposed merger with Three UK remains in “deep conversations” with the Competition and Markets Authority (CMA) but is "progressing well".
Ms Della Valle said: "The substance of the merger remains the one we have discussed in the past that should be really attractive to all stakeholders, not just our customers but also the broader UK base with more investment in our network that will trigger more investment for everyone."
It comes after the UK Government confirmed it would conditionally approve the merger on national security grounds, leaving the final decision with the CMA. Both Vodafone and Three offer pay monthly phone contracts and home broadband, although the latter uses its 4G and 5G mobile network to power household Wi-Fi too.
Last month, the CMA confirmed it would kickstart a so-called Phase 2 probe into the planned £15 billion mega-merger of UK mobile networks Vodafone and Three after both telecom providers told the regulator they would not be offering measures to ease its concerns ahead of the deadline.
The CMA said last month that the tie-up could have a “substantial” impact on competition, warning it may lead to higher prices and reduced quality. The two mobile firms have argued the deal will allow them to increase investment and better compete with major rivals, EE operator BT and Virgin Media-O2.
The regulator said it found in its initial probe that the two companies are important alternatives for mobile customers and combining these two businesses will reduce rivalry between mobile operators to win new customers.
The watchdog also raised concerns that the deal "may make it difficult" for smaller mobile operators – such as Sky Mobile, Lebara and Lyca Mobile – to negotiate good deals for their own customers, by reducing the number of mobile network operators that can host them.
The slew of announcements from Vodafone come as Vodafone took the wraps off a supercharged new Wi-Fi router, dubbed the Power Hub. The upgraded router will be mailed out to all new customers who sign up for a broadband contract with Vodafone from now on.
The Power Hub comes equipped with Wi-Fi 6 — a more recent wireless standard that unlocks faster speeds and bigger data transfers. Coupled with a full-fibre broadband connection, Wi-Fi 6 should be better equipped to juggle more devices without losing a connection.
Vodafone's redesigned Power Hub, pictured left, and the Super Wi-Fi 6 Booster, right, which is designed to complement the new Wi-Fi router with a mesh system that eliminates Wi-Fi blackspots
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Lastly, Wi-Fi 6 supports WPA3 encryption, making it more secure than its predecessor, Wi-Fi 5.
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According to Vodafone, the advancements afforded by Wi-Fi 6 means its new Power Hub can comfortably support up to 100 devices connected to the same network. For those with dozens of smart home gadgets — from smart thermostats, video doorbells, smart speakers, connected lightbulbs, and other gadgets scattered in every room — that increased upper limit is sure to come in handy.
Vodafone, which boasts more than 1.38 million fixed broadband customers nationwide, describes its Power Hub router as being “built for Full Fibre, giving speeds of up to 910Mbps and is designed to work with the latest tech“.
The arrival of the Vodafone Power Hub puts the broadband supplier comfortably ahead of BT, which still only supports Wi-Fi 5 with its Smart Hub 2 router, which ships as standard with all broadband contracts. As such, customers will be restricted to WPA2 encryption. For those who have recently upgraded to a new MacBook Air or Galaxy S24 smartphone, which both come equipped with Wi-Fi 6E, this will be a frustrating omission.
