Vodafone launches Facebook phone

David McQueen/Informa Telecoms & Media
29 Jul 2011

Vodafone today announced the launch of the world’s first prepaid Facebook phone, the Vodafone 555 Blue.

By launching this phone, it is clear that one of Vodafone’s key aims is to grow the adoption of data amongst its users. In the most recent quarter, its data revenues amounted to £1.5 billion ($2.4 billion), which represents only 13.8% of its total service revenues globally.

Vodafone has a total of about 87 million mobile data users globally – out of 380 million customers – so only around one-fifth actively use mobile data. This is a massive opportunity if the operator can sell the right devices at the right price points and with the right features.

Another key target for Vodafone is to bring data-capable devices to the mass market at affordable price points, in this case €100 ($144). While smartphone penetration in Europe is relatively high compared with other regions, it is still only 19.5%.

Therefore we can assume that the next wave of growth will be in the prepaid segment. However, these devices will not just be sold in emerging markets, but also in developed markets. So it is critical to bring devices to market that offer a great Internet experience even where high-speed networks are not available.

Vodafone will work with leading Internet players to build a unique experience (Facebook) for customers. The operator sees own-brand smartphones as a critical to its objectives in mobile data revenue growth. Last year, it launched 14 Vodafone-branded handsets and sold 5.8 million, although that’s down from a peak of about 10 million a couple of years ago. It also works with Huawei, ZTE and now TCL.

However, the device has no Wi-Fi and is 2.5G only, so no 3G. For the present, that’s the reality in many emerging markets. Although the handset isn’t a smartphone, Vodafone states that it does many smart things: Facebook, e-mail, IM, Web browsing, music.

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