Vodafone UK has seen a depressing set of Q1 2009 results with profits falling 45% compared with Q1 2008, that amounts to £255 million down from £431 million. The bad news extends to customers with 450,000 having been lost in Q1; the Q4 2008 figure stood at 19.1 million. In terms of revenue Vodafone saw a drop of 2% year on year, with £5.3 billion having been taken in compared with £5.4 billion in Q1 2008. Vodafone will be keen to recapture lost ground, especially as rival O2 has a subscriber base of 20.8 million compared with Vodafone’s 18.7 million. To that end Vodafone seems to be putting a lot more effort into PAYG, an area, in which arguably it hasn’t had the best repuation.

The new ‘freedom pack’ offering will be advertised across various media and will see large handset subsidies in a bid to attract customers. Freedom packs basically give the customer an allowance of minutes and texts that last for 30 days and vary in amount by how much the customer spends. Vodafone’s PAYG push will be an important move for the network given that approximately 25% of Vodafone’s income is derived from PAYG customers. Vodafone has traditionally been seen as a business and higher priced network by many customers so this strategy will be as much about repositioning the brand a it will be about the basic numbers.