Post #95 - Statistically Insignificant -

There is a number on the third page of Vodafone‘s new report the company would like the market to notice: $1.1 billion, the modelled benefit of its regional network expansion, rendered in the confident blue of a firm paid to be confident.

There is a second number, on page fifty-six, it would prefer nobody noticed. It is eighty. Not eighty million, or eighty thousand – eighty, the number of new customers Deloitte could find to survey about how much they valued the network. It sits beside a sentence the authors were obliged to include and one suspects nobody read aloud in the boardroom: those who subsequently left Vodafone “are not captured in the sample.”

The customers who stayed were asked what the network was worth. The customers who left were not asked anything. On that foundation rests sixty pages about how much everybody supposedly loves it.

What Was Commissioned

The report is titled Connectivity is calling, it runs to sixty-two pages, and it carries the logo of Deloitte Access Economics. It is a serious-looking document.

It is also, by its own first admission, not what it appears – because the document is admirably clear, on page sixty-two, under the heading General Use Restriction: “This report is prepared solely for the use of TPG Telecom Limited. This report is not intended to and should not be relied upon by anyone else.”

So this is not independent research into regional connectivity. It is a report TPG ordered, TPG paid for, and TPG has formally asked that no one else rely upon – which will not stop TPG relying upon it in every submission, briefing and press release between now and the spectrum auction. Deloitte Access Economics has done the work, and there is no cause to doubt the arithmetic within the four corners of its instructions. The question is never whether the sums are right. It is what the sums were asked to add up.

They were asked to add up to a good-news story about the Optus network-sharing deal, and they have obligingly done so: coverage more than doubled, speeds up 350 per cent, $341 million of annual value, a genuine third network in the bush. Each is true in the specific, modelled, carefully bounded sense the report defines, and this masthead disputes not a figure of it.

It merely notices what a good-news story, commissioned by the subject of the good news, is obliged to leave out.

The Coverage That Was Always There

Start with the largest of the claims, because it is the one that dissolves on contact.

Vodafone‘s regional footprint “more than doubled,” the report says, from 400,000 square kilometres to over a million, reaching an additional 800,000 Australians. True – but understand the mechanism. The Optus deal is a network-sharing arrangement. Every one of those additional square kilometres is Optus coverage, which Optus customers, and Telstra customers, and the resellers on both networks, could already stand inside. Nothing was built. No Australian who lacked coverage now has it. What changed is that in areas already served by two networks, there is now a third provider to choose from on the same towers.

This is not a coverage expansion in any sense the word ordinarily carries. It is a branding expansion. The report itself, read carefully, concedes as much: its benefit to the market is framed as competition – “an additional mobile network in areas where only two operators previously competed.” That is the honest description. The dishonest one is a map of Australia turning purple as though Vodafone had strung cable to the outback.

And it produces a quiet absurdity the report does not dwell on. The regional customers now being celebrated as Vodafone joiners were, by definition, not Vodafone customers before – because before the deal, Vodafone had no regional coverage to sell them. They were on Optus or Telstra, on precisely the towers Vodafone now rents. Which means the “expansion” consists, in large part, of moving people from the Optus network to the Optus network, and booking the willingness-to-pay as value created.

The Map and the Question

Consider how the headline $341 million is reached, because the method is the tell.

Deloitte surveyed 574 existing Vodafone customers, showed each of them a map of the expanded coverage, and asked how much they would be willing to pay for it. Not how much they do pay. How much they would. The report is precise about this: the figure is the “maximum willingness-to-pay per year for the network expansion from existing Vodafone customers, over and above the price they currently pay.”

Sit with that phrasing. Maximum willingness to pay – as though the prior question, whether there is any willingness to pay, had been settled. It has not, and this masthead can point to where it was tested for real.

A company that could actually extract this value from its customers would raise its prices and keep them raised. Vodafone has, as documented in Post #94, repriced four times in a single fortnight – premium on the first, discounted on the fourth, a student cut on the twelfth, promotional plans on the fifteenth – precisely because it cannot make a price stick.

The $341 million is what customers say they would pay in a boardroom survey. The pricing page is what they will actually pay, and it is a great deal less, and it is falling.

The willingness-to-pay was measured because the actual charging did not go to plan.

The mechanism, for those who enjoy this sort of thing, is a Gabor-Granger price experiment: a customer paying $50 is asked whether he would accept a ten per cent rise, then a twenty, the increments halving and doubling until his “maximum” is triangulated. A respondent who accepts $55 but rejects $60 is recorded as valuing his plan at $55 to $60.

In a laboratory, with no competitor’s offer on the screen, no half-price Felix plan one tab away, no $2 Woolworths SIM, and none of the ordinary friction and habit that actually governs whether a human being switches telcos. It is a measurement of what someone will say when nothing is at stake, presented as a measurement of what a market will bear. The two are not the same thing, and eighteen months of Vodafone‘s actual results are the proof.

Andrea of Maydena

The report’s emotional centrepiece is a case study, and it repays close reading, because it quietly confirms the opposite of what it intends.

Andrea, an engineer and mountain biker in Maydena, regional Tasmania, joined Vodafone after the expansion and – in her own quoted words – “literally got half of my bill off, switching both phones over for the exact same coverage and the exact same amount of data.” She is offered as the human face of the migration’s success.

Read the sentence again. She did not switch for better coverage; she describes the coverage as “exact same.” She did not switch for more data; she describes the data as “exact same.” She switched because she got half her bill off. Andrea is not evidence that the network is compelling. She is evidence that a fifty per cent discount is compelling, which nobody anywhere has ever doubted.

And a fifty per cent discount is, as this masthead has now written more times than it cares to, a temporary instrument. It runs for six months. Post #94 set out at length what happens at month seven, when the front-book price arrives and the customer who came for half off discovers what full freight looks like – and Vodafone‘s own forums are dotted with customers who did exactly that sum and ported straight back out.

The report has captured Andrea at month three, delighted. It will not be updating us on month seven. Winning a customer at half price is the easy half of the sentence. Keeping her when the price doubles is the half that has defeated this company for four years.

There is a second Tasmanian worth recalling here – the one this masthead met in Post #93, who on the migration of the Moose base onto this same network sat in a public forum and explained, tower by tower, how he would lose his good local Optus signal and be pushed onto a congested umbrella site unusable indoors. He did not halve his bill. He left. Same island, same network, same month.

One was selected for a report TPG paid for; the other selected himself, in a forum TPG did not. The report’s methodology, by its own terms, captures the first and formally excludes the second – because he left, and the survey does not count the ones who leave.

The Thirty-Nine Tasmanians

While in Tasmania, a note on what the case study is standing on.

The survey’s total sample is 1,070. Tasmania’s share of it, per the methodology on page fifty-two, is thirty-nine. The Northern Territory’s is five. The report concedes – to its authors’ professional credit – that “any calculations performed on survey data were only done when sample size was greater than 100,” and that Tasmania, the NT, the ACT, SA and WA were therefore bundled together into an “other states” average to clear that threshold.

So the value attributed to Andrea’s Tasmania is not a Tasmanian figure at all. It is a five-state composite, built to reach a hundred responses, because on its own the island returned thirty-nine. This is disclosed, and it is honest, and it is also the entire problem in miniature: the report is a national coverage story resting, in its extremities, on sample sizes that would embarrass a student survey, extrapolated across a customer base of millions.

The Number They Left Out

There is precisely one subscriber figure in the document, and it must be handled carefully, because TPG will wave it about: the expansion “encouraged 29% more mobile connections per month to join Vodafone from other networks.”

It sounds like growth. It is not growth. It is a gross figure – arrivals – with the number that matters, departures, nowhere on the page. And this masthead knows where the net lands, because TPG discloses it in its own results.

There is a further sleight in the framing. A customer who ports in from another network is counted, immediately, as a win for the expansion. The same customer, six months later, when the half-price offer expires and he ports straight back out, is counted nowhere – not in the 29 per cent, not in the survey, not in the billion. The arrival is attributed to the network. The departure is attributed to nobody. It is a scoreboard that records only the goals for one side.

The arrival is credited to the network. The departure is credited to no one. A turnstile that counts you in and forgets you on the way out.

In the first full half of the Optus agreement, against an analyst consensus of roughly 70,000 postpaid additions, Vodafone added around 15,000. In the second half, it lost around 15,000 – finishing precisely where the first half began. Not one net postpaid customer across the year the report spends sixty pages celebrating, and, worse for the thesis, a trajectory that has turned: modest additions, then outright reversal. The coverage doubled, the speeds quadrupled, the report glowed, and the base went sideways and then backwards.

So the 29 per cent is real, and it is also a confession. If a doubled footprint drove materially more people in, and the base fell, then materially more people went out – the porting-out this masthead has documented from the Moose migration in real time.

A 29 per cent rise in arrivals, at a hotel whose occupancy fell, is not a story about arrivals. It is a story about the corridors.

The report’s own model, to be fair, knows people leave. Buried in the benefit calculation is an assumed annual churn of 14.4 per cent, drawn from TPG‘s own FY25 disclosure and applied to both cohorts across the life of the agreement.

So the economists monetising a five-year benefit have built in, from the outset, that better than one Vodafone customer in seven cancels every year – and must be replaced, at acquisition cost, merely to stand still. It is the truest number in the document, and it appears in a footnote.

Intending to Pay

The report’s forward-looking flourish is that “69% of customers who currently use other providers” say they are “more likely to join Vodafone as a result of the network expansion.” This is offered as momentum. It is a survey of 181 people about their intentions.

Regular readers will feel a familiar sensation, because this is precisely the register of the UBS survey this masthead examined in Post #90. That survey, too, dealt in intention – it reported Vodafone customers growing less inclined to switch away, a stated loyalty offered as evidence the base was firming – and it landed, as these things do, in the same season the company announced its intention to raise the dividend.

Intention to stay, intention to join, intention to pay, intention to lift the dividend: this company speaks fluently about what its customers are about to do, and falls silent on what they have actually done.

Because the actuals are unhelpful, and they are not surveyed – they are audited. The UBS survey said switching intent was softening; the 4E said the postpaid base went backwards.

This report says 69 per cent of rival customers intend to join; the 4E says the base went backwards. Stated intention has now been tested against revealed preference twice in three months, in these pages, and revealed preference has yet to lose.

The difference between the two is the difference between a survey, which can be commissioned, and a subscriber number, which cannot.

There is a reason a company reaches for what people say. It is that saying can be commissioned, and a 4E cannot. What a company cannot pay for is the audited subscriber line in its own results, which is why that line, and not this report, is where the truth about the network expansion is written.

The Half Nobody Modelled

Two further omissions, briefly, because they define the shape of what was left out.

The report values faster download speeds by borrowing a coefficient from 2024 research into fixed broadband – 0.04 per cent of GDP per additional megabit – and applying it to Vodafone‘s mobile speed uplift to conjure $89 million of national productivity. Leave aside the propriety of valuing mobile speed with a fixed-line coefficient. The deeper problem is the counterfactual. These regional customers were not sitting in the dark before Vodafone arrived; they were on Optus or Telstra, at speeds that were, by definition, already adequate. Vodafone‘s speeds rose 350 per cent against Vodafone‘s own dismal starting point. Measured against the networks these customers actually used before, the productivity miracle shrinks to a rounding error, because their tasks were already loading.

And the report is a study of the customers the expansion helped.

It is silent on the ones it did not: the large cohort of metropolitan Vodafone customers – the network’s traditional base, the city-dwellers who bought it for the $5 daily roaming and never needed a paddock’s worth of coverage – who receive nothing from this deal and are being asked, on the pricing page, to help fund it.

It is silent on the fringe customers stranded on the old, slow, un-shared Vodafone network.

And it is silent on the travellers who, the moment they roam beyond the shared footprint into the areas the MOCN excludes, lose signal an Optus customer standing beside them would keep. The report celebrates the postcodes where a Vodafone site was added. The rest of the country, and the rest of the customer base, is simply outside the frame.

Buying the Proof

This masthead has watched this reflex before, twice, and it is worth setting the three instances side by side, because together they describe a method.

In Post #68 it was sponsored content in the national press – an advertisement wearing the typeface of journalism, a favourable story about TPG that a reader could easily mistake for the newspaper’s own view, because that is precisely what sponsored content is designed to achieve.

In Post #71 it was the procession of advertising agencies, hired and fired and hired again on the long march to no growth at all – message after message, purchased and discarded, none of them able to sell a product the numbers would not support.

And now, in the form of a commissioned economic report, the third and most expensive instrument of the same trade.

Consider the progression, because it is telling.

Sponsored content buys a headline – cheap, disposable, gone by the weekend.

An advertising campaign buys a message – dearer, glossier, but visibly an advertisement.

A commissioned report from a blue-chip economics firm buys the one thing neither of the others can: the appearance of independent proof, the imprimatur of a name that carries weight in submissions and boardrooms and regulatory processes.

It is the same transaction throughout – a company that cannot generate a favourable fact purchasing a favourable impression – merely moving up the ladder of respectability, growing more costly and more authoritative at each rung. A headline, then a campaign, then Deloitte.

What none of the three has ever managed to buy is a net customer. That number is not for sale, which is why it keeps saying no.

What a Report Is For

None of this is an attack on Deloitte, whose modelling is careful and whose caveats are, to their professional credit, all present – the sample of eighty, the exclusion of leavers, the bundled states, the fixed-line coefficient, the assumed churn, the hypothetical willingness-to-pay, the General Use Restriction on the final page. Everything required to see through the report is in the report. That is how a good economics firm protects itself: it states exactly what it was asked, and exactly what it was not, and leaves the reader to notice which is which.

The only question worth asking is why TPG wanted this, and wanted it now.

The answer is the answer every time. When the numbers a company cannot control are poor – the flat base turning negative, the churn, the customers narrating their departure tower by tower – it commissions numbers it can.

A willingness-to-pay can be commissioned. A survey of intentions can be commissioned. A case study of a delighted customer three months into a six-month discount can be commissioned.

What cannot be commissioned is the audited postpaid line, which is why it says what it says, and why no amount of blue-rendered modelling will change it.

The customers were shown a map and asked what they would pay. Out on the network, the ones the survey did not count have already answered, in the only currency that clears. They ported out.

$1.1 billion of willingness, on page three. Not one net postpaid customer, in the annual report. One suspects the reader will manage the reconciliation unassisted.

Right of Reply

TPG Telecom Limited, Vodafone, Deloitte Access Economics, Optus, and any individual or entity who considers themselves referenced in this article are warmly invited to correct, clarify, or add context to anything set out above.

Verified responses sent to vodafailed@gmail.com will be published in full and without editorial amendment, alongside the original article.

Disclosure, Disclaimer & Legal Notice

This article is independent commentary and analysis on a matter of public interest. It concerns a report titled Connectivity is calling: The economic and social benefits of expanded regional network coverage (2026), prepared by Deloitte Access Economics for TPG Telecom Limited, and quotes that report’s own published figures, case studies, methodology and stated limitations – including its willingness-to-pay approach (Appendix D), its survey methodology and sample sizes (Appendix B), its productivity modelling approach (Appendix C), and its General Use Restriction. All figures and quotations attributed to the report are as stated in it. All characterisations of its methodology are drawn from its own descriptions. Subscriber, churn and consensus figures concerning TPG Telecom are drawn from the company’s own ASX disclosures and publicly reported analyst commentary. Consumer comments referred to are the publicly posted opinions of their authors, discussed in this masthead’s earlier posts and reproduced for comment and analysis.

Nothing in this article asserts that the report is inaccurate, that its modelling is flawed, or that Deloitte Access Economics has acted other than professionally and in accordance with its instructions. Commissioned research is a legitimate and widespread practice, and the observations made concern the scope of what a commissioned report necessarily includes and excludes, the interpretation and limitations of its figures, the counterfactuals it adopts, and the purposes for which such a report may be deployed – all matters of analysis and honest opinion, reasonably held on the basis of the report’s own contents, including its own stated caveats.

Case-study individuals named in the report (including “Andrea”) are referred to solely as they appear in the published report and its direct quotations; no comment, criticism or inference is made or intended as to any such person beyond the report’s own account. The observation regarding promotional pricing concerns the general and publicly documented practice of introductory discounting and its expiry, not any individual’s personal circumstances or future conduct.

Characterisations of TPG Telecom‘s commercial position, trajectory and strategy are the author’s opinion and reasonable inference drawn from publicly available material, including the company’s own disclosures and the report discussed. They are not statements of fact as to solvency, viability or future performance, and nothing here asserts that TPG Telecom is insolvent or unable to meet its obligations.

All views expressed are the author’s honest opinions, formed on reasonable grounds, and are published in reliance on the protections afforded to honest opinion, fair comment, and publication in the public interest under the Defamation Act 2005 (NSW). No allegation is made, and none should be read, that TPG Telecom, Vodafone, Deloitte Access Economics, Optus or any related entity or individual has engaged in misleading conduct or any breach of any law, regulation, code or standard. All entities and individuals retain the presumption of lawful conduct unless a competent authority determines otherwise.

This is not financial, investment, or legal advice, and nothing in it constitutes a recommendation to buy, hold, or sell any security. TPG Telecom, Vodafone, Deloitte, Deloitte Access Economics, Optus, Telstra, Felix and related names are trademarks of their respective owners, used here for identification, commentary and analysis only.

The author has an active dispute with TPG Telecom Limited (ASX: TPG), has made protected disclosures under Part 9.4AAA of the Corporations Act 2001 (Cth), and holds an immaterial shareholding in TPG Telecom Limited. These interests should be weighed when reading this commentary.

Previous posts in this series:

Post #65 – When The Music Stops

Post #66 – The $2B Problem TPG Can’t Afford

Post #67 – The Bonus Year: Thin Earnings, Thick Optics

Post #68 – Buying the Narrative

Post #69 – The Smart Money Just Left the Building

Post #70 – Who’s Watching the Watchers?

Post #71 – Nine Lives: The Ad Agencies Vodafone Burned Through on the Way to Zero Growth

Post #72 – Marked Safe from the Whistleblower Policy

Post #73 – The Story Nobody Will Publish

Post #74 – Nothing Out Here

Post #75 – The Gift That Keeps Giving