Jan 18, 2013

The Crazy calls that saw Vodafone trash its brand

How did Vodafone manage to kill a once-thriving brand in Crazy John's? Bad management, probably, but the death and ultimate distance from its founder didn't help.

John Ilhan’s widow Patricia sold his Crazy John’s mobile reseller empire in 2008 to Vodafone for a reported $200 million. Five years later, Vodafone has destroyed the entire value of its acquisition. As management follies go, that is significant.

Admittedly, Patricia Ilhan’s timing was perfect — just before the global financial crisis unfolded. And the writing was on the wall for resellers, even before the GFC, says independent telecommunications expert Paul Budde. “Go back 10 or 15 years, and resellers made a profit of 20% to 30%. Now they make 5% and a lot of telecom operators says let’s not give them the 5%, let’s use it ourselves. It is no longer cost-effective,” he said.

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9 thoughts on “The Crazy calls that saw Vodafone trash its brand

  1. Xoanon

    Slightly off topic, but the removal of any brand beginning with the word “Crazy” will at least help improve the aesthetics of Australia’s shopping strips.

  2. Ronson Dalby

    I guess we won’t ever see the number of resellers again like it once was, however, it does seem to be on the increase with even Telstra wholesale now in the picture via Kogan Mobile and it’s rumoured that Boost Mobile will also go to Telstra next month.

    For some strange reason Vodafone is also increasing prices and, at the same time, decreasing the included value of them. For example, from Feb 13, prepaid mobile data rates will be calculated in megabytes.

    I can’t help feeling that Vodafone is on a suicide mission. It would be a blow for consumers if our telco market was reduced to only two players – Telstra and Optus.

  3. luke russell

    Bravo to Xoanon’s comment! And actually very relevant to the content of the article. People that buy from brands named “Crazy XXXX” are quite different than the mainstream and one would expect them to be more loyal than the commodity brands such as Voda, Optus and boring old Telstra.

  4. sickofitall

    Vodafone are shocking. their bills are random numbers, rather than any ordered, predictable sense of what you’ve used and hence what you own. I suspect it will leave Australia in the next 6 months. (I have a contract with them: as soon as it is up, I’m gone.)

    acttually, I still struggle to see why the old government monopoly didn’t work – prices haven’t gone down, and the competiion has just pushed the money off-shore.

  5. Simon

    Bingo!!! Great article. Pretty much nailed it.

  6. green-orange

    Well, the Optus buyout of Virgin didn’t work out all that well.

    I think the insane retail rents charged in shopping malls may have had something to do with it as well.

  7. Daly

    What another bad management tale. Two so far today and both in industries where it takes real stupidity to loose money!

  8. floorer

    sickofitall, I think you’re wrong. Vodafail bills are okay pretty similiar to everybody elses. They have a website you can go to which shows what they’re building now and what they’re going to build so I doubt they’re going anywhere soon. Re the govt. monopoly being better you’ve got to kidding. Telstras had to dragged kicking and screaming by the likes of 3 to present anything like a competitive monthly plan. Only thing I find dodgy is something you didn’t mention their coverage, which can surprise by working in some out of the way place and then fail somewhere in the metro area (Adelaide).

  9. Simon

    I wouldn’t call any plan provided by a major in the telco industry competitive. You couldn’t find an industry more full of signalling and price fixing.

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