A strategic partnership was formed between Vodafone and Hutchison Telecom yesterday, which will start working together "upon the expiration of Vodafone's contractual agreement with its existing partner in Hong Kong".
That existing partner is SmarTone, which agreed not to renew its marketing cooperation with Vodafone on Monday.
In December, Hutchison Telecom Hong Kong will become the preferred non-equity partner of Vodafone in roaming and global corporate sales services. It will also be entitled to use the Vodafone brand, devices and services in Hong Kong.
Shirley Chung, general manager of customer relationship development of SmarTone-Vodafone elaborated on the reason for the fallout as divergence in strategies for marketing positioning, service and product propositions, quality, retail operations and best practice sharing.
"The business case for continuing the cooperation with Vodafone is no longer there, as costs outweigh benefits. SmarTone will be better off (alone) in terms of cost, operational focus, and flexibility," she said.
Chung continued that Vodafone has little brand impact in Hong Kong as
people still generally refer to SmarTone's Chinese name locally. The local telco would not be running a brand campaign to disassociate itself from Vodafone due to its brand expression being based on off SmarTone's expression 'Love the difference', not Vodafone's 'Power to you'.
This follows news on the same day that Vodafone has been accepted as a member of the Conexus Mobile Alliance in Asia, which means a series of partnerships with Hutchison Telecom in Hong Kong, FarEasTone in Taiwan, NTT DOCOMO in Japan, SMART in the Philippines, StarHub in Singapore and TrueMove in Thailand.
Vodafone Global Enterprise’s sales director for Asia and sub-Saharan Africa Stevan Hoyle said this would also help Vodafone and Conexus members to net MNC customers seeking to ink a single telecommunications contract instead of multiple deals across various geographies.
In Hong Kong, the Vodafone-Hutchison duo plans to provide customers with "enhanced network coverage, harmonised roaming rates across multiple countries and greater cost efficiencies".
In response, Chung held the view that synergies from these alliances are "few and far between, with no material cost or technology advantages. "There is actually no such thing as an 'international edge', we believes that all markets are local; there are vast differences in customer needs, culture, market dynamics, and there is no one-size-fits-all international strategy that works well," she said.
HTHKH's chief executive officer Peter Wong however said the partnership will "enhance abilities to meet growing demand among multinational corporations for sophisticated voice and data communications services".
SmarTone-Vodafone has been late to the
4G LTE game, but Chung said that technology is "not mature now as it's still unstable and buggy", with no supporting LTE devices except one dongle that’s available in the market (by CSL). She said SmarTone will launch it when "the time is right".
Along with HTHKH's 'Three' brand and CSL, SmarTone-Vodafone claim the shouting rights of being official Apple distributors in Hong Kong. Chung assured that the distributorship for the imminent iPhone 5 launch will not be affected by its non-cooperation with Vodafone.
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