Vodafone dumps cricket, motorsport sponsorship June 7, 2012 - 4:52PM Read later
Vodafone won't be on show next year. Photo: Sebastian Costanzo
Vodafone is to end its sponsorship of cricket and V8 Supercars and plough the money instead into its mobile phone network and improving customer service.
The mobile phone company which has struggled with its reception in recent years has said that it will not renew its sponsorship of the Australian cricket team from next March.
Its involvement in V8 Supercars through its Team Vodafone finishes at the end of this year, the company said today.
Advertisement: Story continues below Vodafone has been a sponsor of the Australian cricket team for 11 years and clocked up six years with motorsport.
The decision to pull out of sponsorship and focus on network investment was made earlier this year before the company's new chief executive, Bill Morrow, took over from Nigel Dews in late March. But the director of Vodafone's consumer business unit Noel Hamill said Mr Morrow "absolutely endorsed" the decision.
The carrier was besieged by complaints in late 2010 because its network was unprepared for the amount of mobile data used by smartphones. Its customer base fell by 554,000 to 7 million by the end of 2011 as consumers abandoned it in search of more reliable service.
The complaints reached their height in the midst of the company's sponsorship of the cricket season and the resulting bad publicity - dubbed Vodafail on social media sites - cancelled out any feelgood factor from the cricket sponsorship.
“It's been an absolute privilege and honour to be the major sponsor of Australia's summer of cricket over so many years,” Mr Hamill said.
“We've been fortunate to be the major sponsor of the Australian Test Cricket Team during an era that has featured some of the true greats of the game, including the Waugh brothers, Warne, McGrath, Gilly, Ponting, and Michael Clarke. We wish the team every success in the future,” he said.
Exploring options
TeamVodafone will finish its run in its current livery at the end of the 2012 V8 Supercar Championship. Vodafone said that it will continue to explore ongoing sponsorship opportunities with Triple Eight Race Engineering, Craig Lowndes and Jamie Whincup.
Vodafone spent $141.7 million on "advertising and promotion expenses" in 2010-11 according to financial reports filed with the corporate regulator, down from $149.2 million the previous year.
Mr Hamill said the financial benefits of exiting the sponsorship deals would not flow to Vodafone's bottom line until the 2013-14 financial year.
Vodafone Hutchison Australia emerged from a 2009 merger between the Australian subsidiary of the UK-based Vodafone and Hutchison Whampoa's '3' brand.
The joint venture made just $10 million in 2009-10, but recorded a $444.7 million loss in 2010-11. However both parents have publicly said they will keep supporting the Australian business.
By September this year Vodafone expects to finish installing 1,500 new base stations on a new frequency and upgrading all of its existing 3G base stations with new equipment. It has installed 1,400 new base stations in capital cities and 500 new base stations in regional areas.
