Vodafone to invest EUR 55 mln in 4G expansion and Romanian store network, focuses on franchised units

Vodafone, the second largest telecom operator in Romania, will invest EUR 55 million in its network of stores across Romania in the coming two years. The money will be spent both on opening new stores, and in expanding the 4G network. The telecom company wants to expand via franchise, which will apply both to its existing 200 stores, and to the stores which will open in the future. Basically Vodafone will offer entrepreneurs the option to take one of its existing stores under franchise. So far, Vodafone already has placed seven such stores under franchise, and six more will open by the end of this year. Vodafone currently has 610 stores exclusively under this brand, out of which 200 run by the company, and the rest by dealers. The telecom company realized that a 30-35 sqm store under franchise is more efficient and better performing that a similar size store run by Vodafone or by a dealer. For larger stores, of some 100 sqm, the operator will retain ownership and operations, and it found that the numbers are better when such a unit is run by the operator itself. Vodafone Romania will offer its franchisees know how, systems, applications and training programs for sales staff, as well as cover the refurbishment or the store which will be taken under franchise. These expenses would cover two thirds of the investment value, and the franchisee will cover the rest, meaning the stock of products and salaries for the employees for a certain period of time, plus the tax to enter the system. Some of the existing franchises have already been taken over by former Vodafone employees who went entrepreneurial. “We expect other current employees, such as heads of stores, to enter the system. We are also looking for people outside the company,” said Alexandru Băloi, head of indirect sales with Vodafone Romania. The stores opened under franchise so far are in Bucharest, Iasi and Cluj – Napoca, but the program will expand further nationwide in 2014. Vodafone Romania’s recent results show the telecom giant has increased is customers by more than 300,000 during the second and third quarters but its service revenues dipped. Releasing six-months to September performance indicators, the company said it had 8.1 million customers at the end of September in Romania, a growth of 308,703 customers compared to same period last year. Meanwhile its service revenue was EUR 352.9 million for period, a drop 3.6 percent compared to the six-month period in 2012. editor@romania-insider.com