SUCCESSFUL business people tend to be passionate about what they sell. Bill Gates is a computer nerd, Ben & Jerry are both nutty about ice cream and Victor Kiam loved Remington razors so much he “bought the company”.
Teresa Elder, Vodafone Ireland’s chief executive, just loves to talk.
The company’s results last week showed Vodafone sold almost 1.3 billion talk minutes in the Irish market last year. And Elder gives the impression she may have been responsible for a fair chunk of them.
“I do talk a lot, so I didn’t just get into the mobile phone industry by chance. I just love talking,” said the sunny-faced American.
She pauses momentarily for breath before setting off again.
“Really, I do. The only time I switch off my mobile is when I’m on a plane. It evens bothers me that I have to switch it off then,” she says. “I always have my mobile and BlackBerry with me wherever I go. Knowing what’s going on and staying connected helps me relax.”
On the face of it, relaxation shouldn’t be a problem for Elder, who has done stints at Airtouch Cellular and cable company Media One in America. Vodafone Ireland added 123,000 customers to its books in the year to the end of March and talk minutes were up 10%. The Irish operation was also the star performer of the Vodafone group, which lost a record £14.85 billion (€21.8 billion) last year.
However, with rising competition in the form of a resurgent Meteor, the arrival of new competitors 3 and, possibly, Smart Telecom, not to mention constant regulatory battles, Elder may need her gift of the gab to explain to her bosses how she plans to protect the company’s enviable position as top banana in the Irish mobile market.
“People are using their mobiles more and their fixed lines less,” she said. “They are also starting to use them differently. And at the same time the overall telecommunications pie is growing.
“Growth in the future will come with mobile-to-fixed line convergence,” she added, using jargon to explain what happens when mobile phone companies pinch business from fixed-line operators and vice versa.
Vodafone is rumoured to be mulling over a deal that would see BT Ireland piggyback on part of its network to introduce a convergence product called Fusion. Elder refused to be drawn on whether any agreement of this type was imminent. “Do you really expect me to say anything about that?” she said with a knowing smile.
Elder also talks up 3G as a potential revenue driver, despite scepticism from industry observers who believe it will have to offer a lot more than Gnarls Barkley downloads if it is to contribute meaningfully to the operator’s coffers.
“The appetite for 3G services has been phenomenal and the take-up rate has been much greater here than some other countries. We sold 1.3m video downloads and 500,000 music tracks last year,” said Elder in response to the suggestion 3G was just an expensive folly.
At current prices, 500,000 music tracks would have pulled in about €1m while 1.3m videos would have earned it up to €2.6m. Either way, a grand total of less than €4m is just a drop in the ocean for Vodafone, accounting for less than 0.5% of its total revenue.
What does make a lot of money for the company, however, is text messaging. The Irish are keypad trigger-happy; Vodafone Ireland customers send more than 6m texts a day.
Elder, however, was a late convert to texting.
“I had probably sent less than 10 texts in my life before I got to Ireland (at the beginning of last year). It’s not very prevalent in the US, but since I’ve been here my texting speed has gone up.
“I once asked someone: ‘Why do you guys text so much over in Ireland?’ And they told me it was because you could talk to two people at once. It shows how connected this society is,” she said.
She reiterates the line that a large part of Vodafone’s Irish success, and huge profits, is down to the fact people here like to talk a lot.
She is prepared for the rip-off argument and points to Ireland’s position at the top of the European Arpu (average revenue per user) league table.
“Let’s talk about those price comparisons,” she said. “Arpu is made up of two components — the minutes used and the rate per minute. Minutes used here are the highest in Europe, but on the rates side they are below the European average.”
If we like to yap so much, however, shouldn’t Vodafone reward us with more rate cuts? “That’s happening already. But when we reduce the rates, the minutes of use just go up exponentially.
“Last year rates went down and minutes went up by 10%. People say: ‘That’s great, thanks for giving us that value back, Vodafone,’ and start using their mobiles even more.”
Vodafone recently launched a raft of 5c a minute pre-paid rates aimed at immigrants who need to keep in touch with their families, leaving itself open to the accusation that if it can make money from Chinese users calling home for next to nothing, why can it not extend that to Irish users.
“That’s all down to interconnector rates and so on,” she said.
Still, nobody can deny Vodafone’s, and Elder’s, ability to maintain market leadership, even when it seems like the whole country is lining up to have a go over pricing. Despite its parent company’s miserable performance last year, Elder said the Irish business has no plans to make cuts in its operations, pointing to its recent announcement of an €8m research centre.
When she’s not running the country’s biggest mobile operator, Elder does some charity work. She once took two years away from her job in America to raise money for cystic fibrosis research (her son was diagnosed with the illness 10 years ago), and is keen to point out the work that still needs to be done in this area in Ireland, which has one of the lowest life expectancies for sufferers in the western world.
Elder brushes off any perceptions that there is a touch of the American tourist about her, even though she admits to a fondness for “Hooley Nights” in Johnny Foxe’s pub, a staple of the tourist trail. “If you have someone in town visiting, you kind of have to bring them (there), don’t you?” she said.
Elder is upbeat about Vodafone’s future. “We have to constantly offer new things to our 2m customers and the biggest threat to Vodafone is if we get complacent or arrogant.
“The market has changed in the past 12 months and it will change dramatically in the next 12. There’s going to be so many exciting things happening. So stay tuned.”
VITAL STATISTICS
Age: 44
Family: Married for 24 years with two sons
Education: Creighton University and Stanford
Hobbies: Outdoor pursuits, photography and music, especially the new Red Hot Chili Peppers album
Favourite book: There are too many to choose from
Favourite film: Life Is Beautiful in Italian with English subtitles
WORKING DAY
I WAKE up between 5.30am and 6am and grab my BlackBerry. I consider myself a mobile worker, no pun intended. I come in to the office most days, though. I like to get home in time for dinner with my family, although I might make a few calls afterwards. I like integrating my work with the rest of my life.
