More than a little Blarney in Vodafone rates

Business Opinion John McManusVodafone reports its annual results tomorrow. By all accounts they will be pretty good. Earnings are expected to rise 23 per cent to around £11 billion (€15.3 billion), while revenue will increase by something nearer 30 per cent to £30 billion.

This is pretty good news for Vodafone shareholders, some 400,000 of whom live here. Hopefully it will drive the shares up from their current £1.25 sterling to something closer to the £2.03 at which the all-share sale of Eircell went through in May 2001. They would need to do a good bit better than that, however, before Irish shareholders might recover the money lost on the Eircom flotation, but we won't go into that.

One thing we can be sure will not be revealed on Tuesday is Voice Minutes Of Use or MOU data for all of Vodafone's territories. These are figures for the average amount of time Vodafone customers use their phones.

The Association of Licensed Telecoms Operators in Ireland (ALTO) has challenged both Vodafone and O2 to publish this data. The reason being that when you take figures for what people pay - Average Revenue Per User or ARPU - and divide it by the MOU it gives you a very crude average cost per minute. This in turn allows comparison across markets and territories.

The reason there is so much interest in this issue is that Ireland has the highest ARPU figures in Europe for both Vodafone and O2. In the case of O2, the average Irish user spent €546 last year, while for Vodafone it was around €542 in the 12 months to last December.

This compares with spending per customer for Vodafone in the UK of €445 and Italy of €347, while the Spaniards spent €377. O2's customers in the UK spent €382, while their counterparts in Germany and the Netherlands spent €340 and €279 respectively.

The reason why the spending per customer for both companies in Ireland is up to 50 per cent higher is not, as you might suspect, because they are ripping us off. Apparently the reason is because the Irish talk so much. Yes, apparently we are charged pretty much the same as everybody else in Europe, but because of our national predilection for talking we incur higher bills.

There is something so preposterous about this assertion that it might just be true. It is hard to believe that companies such as Vodafone and O2 would resort to making up such nonsense to cover up overcharging.

That said it is still hard for anyone who has ever sat behind two Spanish kids on the 46A bus to really accept that we talk more than they do. Hence the call from ALTO for the two companies to come clean on average minutes as well as revenues in order to settle the issue.

O2 did published some average minutes figures last week along with its results. They were for Ireland, Germany and the UK and came to 188 minutes, 109 minutes and 107 minutes respectively.

When you multiply these figures by 12 to get annual minutes and divide the ARPU by it, you get a crude cost per minute. These come to 30 cents per minute in the UK, 26 cents per minute in Germany and 24 cents in Ireland.

So it does appear that the mobile phone companies are telling the truth. Rates here are competitive, but bills are large because we just can't stop blathering.

Hang on a minute. Where are the average minutes for O2's other big European market, the Netherlands. Surely if there is some cultural divide between the chatterbox Celts and taciturn Germanic types, then the Dutch figures should confirm it. But for some reason the Dutch figures were not provided by O2 last week.

In addition O2 does not operate in any of the large southern European markets. In fact, it seems the only way that we can really get to the bottom of this will be if Vodafone were to publish MOUs for all its markets. Hopefully it will do just that tomorrow, but I would not hold my breath.

But if you can't wait until tomorrow I suggest you trawl through the hundreds of press releases in the media centre on Vodafone's web site (www. Vodafone.com) and there you will find the results for the nine months to December for Vodafone's Portuguese operation, Vodafone Telecel.

These reveal that the average Portuguese customer spoke for 154 minutes a month. This is more than either the average British or German mobile user - according to O2's figures - and getting up towards the 188 minutes of fellow Celts, such as the can't-stop-talking Irish. But for some reason the average revenue per user in Portugal was €28.79 per month or €345.48 on an annual basis. This is the sort of ARPU that one might expect from the monosyllabic Germanic races, rather than loquacious Latins.

The reason for this is that average cost per minute in Portugal is around 19 cents. And in turn one suspects the reason for this is that Portuguese would not be so stupid as to swallow some rubbish from their mobile phone companies that they should happily pay the highest bills in Europe because they talk the most.