Post #102 - Vodafail and Vodagone -

Two subsidiaries of the same parent, carrying the same brand and the same grudge. One was sold in 2019 to infrastructure investors, under whom the business fixed the network, fixed the service, fixed the price, stopped paying Vodafone Group for a name its own chief executive had put on a screen in front of his own staff under the words “Dear Vodafone, you suck”, and only then asked the country to reconsider it.

It now has the southern hemisphere’s first nationwide satellite direct-to-cell service. By 2022 it had returned almost a billion dollars to owners who had paid $1.03 billion for it, and still held half.

The other merged with TPG, kept the name, and now pays a licence fee for it to a shareholder on its own board. Last year it earned seven million dollars, underlying, before tax, from continuing operations.

Jason Paris ran the first one for eight years, and was generous about everybody in Australia.

TPG‘s accounts were less discreet.

This masthead has spent a year on the second of those businesses.

Last week The Ryan Tan Show spoke to the man who fixed the first.

Jason Paris left One New Zealand last week, after almost eight years, for Les Mills International. What he set out was not a strategy. It was an order of operations – the sequence in which a broken telco has to be repaired, and what becomes of a company that attempts the steps in the wrong order.

Three Words

Ask a chief executive what was wrong with the company he inherited and the answer is usually a paragraph, and usually about transformation.

Paris took three words.

“Network performance. Service performance. And value for money.”

Then the diagnosis, which is sharper than it first reads:

“It wasn’t really on our price point. It was the fact that we were perceived to have a poor network and poor service for the price point we were charging, which was making people a bit grumpy about paying their bills.”

The problem was not that the price was too high. The problem was that the product did not justify it. Those are different problems, and only one of them responds to moving the price.

Readers of Post #94 will recall a company that changed its price list four times in a fortnight, then reversed the change. On the evidence, it has been treating the wrong one.

“Dear Vodafone, You Suck”

What Paris did next is easily mistaken for a stunt, which is why it is worth setting out exactly.

He stood in front of his own staff and put the words “Dear Vodafone, you suck” on the screen. He read out customer hate mail, including the letters attacking him personally. Then he published his email address and invited customers to send more.

He still reads them.

“I wanted people to know that I’d heard them, that we had heard them. That we knew, that we weren’t good enough… that one kind of line or opening meant that they were leaning in and listening and going, okay, so what is the plan?”

“It was a way to disarm the frustration from our customers and our way of holding a mirror up to the organisation.”

The slide was not the method. It was the output of one.

“I just had loads of conversations with our customers, with our people, with our teams… I asked them a simple question: what’s working? What’s not working? And if you were me, what would you do tomorrow?… over a thousand conversations, and then reading social media posts from customers, and talking to partners, kind of boiled it down to the three or four things that we really needed to prioritise.”

A thousand conversations, reduced to three words. No agency ran it, no consultant framed it, and it happened before a dollar was spent.

And he did not stop when the turnaround was done. Eight years on he was still doing it, and for a reason that has nothing to do with customer service:

“One of the reasons that I still spend so much time with our customers is, it forces the entire organisation to do that too. They know that if they want to have a conversation with me about a change or an investment or a play in market, they better have talked to a lot of customers, because I’ve probably talked to a thousand in the last month.”

The chief executive has spoken to more customers this month than anyone reporting to him. Nobody can brief around that, and nobody can filter it.

Consider what that cost. No capital expenditure. No board paper. No regulatory filing, no adviser, no agency. A company said out loud the thing its customers already believed, and bought itself permission to be heard.

It is the cheapest item in the entire sequence, and it remains conspicuously unattempted at this end of the Tasman.

What Happened To The Other One

It is worth remembering, because almost nobody does, that Vodafone in Australia was once good.

Through the 1990s it was a genuine challenger with a genuine network. In the GSM era its coverage was competitive, its pricing was sharp, and it took share from incumbents who had not previously had to earn it. Australians who signed up were not settling. They were choosing.

What broke it was not a merger, a regulator or a rival. It was the smartphone.

When the iPhone arrived and data consumption stopped resembling anything the network had been dimensioned for, Vodafone‘s capacity did not keep pace. Calls dropped. Data crawled. And in 2010 the failure acquired a name, coined by customers rather than competitors, which the company has now carried for fifteen years and which appears in the address bar of this masthead.

In 2011 it also acquired a musical.

Two Sydney comedians set the company’s network failures to Lady Gaga’s Telephone – the choice of song requiring no explanation – and put it online, where it did what these things do.

There is a point at which a company’s failures stop producing complaints and start producing entertainment. Vodafone Australia reached it inside six months.

Fifteen years later, the name is still on the shopfronts.

Paris named it himself, unprompted, when listing the industry’s failures: “back in the day, Vodafone had Vodafail.”

That is the point of divergence. Not a strategic error, not a governance failure – an investment cycle missed at precisely the moment demand changed shape. Everything since has been an attempt to catch up to a position the company once held comfortably.

And the catching-up has been unlucky in ways that deserve stating plainly, because this masthead is not in the business of pretending every difficulty was self-inflicted.

In 2018 the Australian government issued security guidance that effectively excluded Huawei from 5G networks. The commercial consequence for what would become TPG Telecom was unusually severe, because it landed on both halves of the future company at once. TPG had been building a mobile network using Huawei equipment and abandoned it. Vodafone Hutchison Australia carried Huawei equipment in its own network. One national security decision, two balance sheets, and a 5G starting line the company reached behind competitors who had chosen differently.

That was not incompetence. It was policy, and policy is nobody’s fault in a commercial sense.

But it does explain the shape of the last fifteen years: a company that lost its network advantage to an investment cycle it missed, then spent a decade attempting to recover it while the ground kept moving. The New Zealand business faced a version of the same industry. It responded to it differently, and under different owners.

Paris walked into the New Zealand version of that same story in 2018 and described what he found in terms nobody uses about a broken company:

“When I walked in there, I was like, oh my God, it’s like discovering a gold mine. The biggest challenge for me, for us, was where do you start? Because there’s so much opportunity for improvement in this business. The hardest thing was to prioritise which ones to go after first, and which order.”

Note the last three words. He was thinking about sequence before he had finished his first hundred days.

Which is where the comparison begins to be about something other than luck.

The Anchor

The second thing could not be bought with candour, and his word for it is the right one.

“The biggest unlock, to be honest, was the ownership change because it cut the anchor on the business. It allowed us to do what we needed to do from an investment, from a strategic perspective, from a change perspective, without having to go to group to ask permission, or get the computer to say no.”

The impediment, he says, was never talent. It was that the operating model was written in Europe:

“They had a very set formula where they had a centralised strategy and head office in Europe that basically said, this is how you run a high performing telco. And it worked in some markets, but not all markets.”

There is no direct equivalent in Australia, where the business did not change owners so much as change shape. But the anchor did not come off. It doubled.

TPG Telecom is held, in substantial part, by two foreign parents – Hutchison and Vodafone Group plc – neither of which is a natural long-term holder of a mid-cap Australian telco, and both of which have been the subject of recurring exit speculation in the financial press for years. A proposed transaction involving the Hutchison interest was reported earlier this year. Speculation is speculation, and this masthead treats it as nothing more.

But the structural position is not speculative. One New Zealand was bought by investors who wanted to own it, improve it, and be paid from the improvement. The Australian business is majority-held by two parties widely reported to be considering the door – which is a different set of incentives entirely, and one that does not obviously prioritise a five-year rebuild.

The question generalises past ownership structure, and it is short: who has to approve the fix, and how far from the customer do they sit?

Rent on the Name

There is a detail in the Australian structure that has no counterpart across the Tasman.

TPG Telecom does not own the Vodafone brand. It licenses it, from Vodafone Group plc, which is also one of its two largest shareholders and is represented on its board. The arrangement is disclosed and entirely ordinary in form.

The fee is not separately broken out. Brand licences of this kind are conventionally struck as a percentage of service revenue, and the market’s working assumption is around one per cent. Apply that convention to a service revenue base of TPG‘s size and the answer lands in the tens of millions annually. This masthead cannot verify the figure, does not assert it, and offers only the methodology by which others have reached it.

Whatever the number, set it against seven million dollars of underlying pre-tax profit and the arithmetic arranges itself without assistance.

Now consider what One New Zealand did, because it is the most instructive decision in this entire story and it is routinely mistaken for a rebrand.

It was not a rebrand. It was an unbundling.

Paris and his owners looked at what Vodafone Group actually supplied and separated the useful from the expensive. The roaming footprint – genuinely valuable, genuinely hard to replicate, and now sold to New Zealanders at a flat daily rate – was worth keeping, and was kept, through commercial arrangement rather than ownership. The name, which the company’s own chief executive had by then already projected onto a screen above the words ‘you suck’, was not.

They took the plumbing and left the sign.

That is the move. Not the courage to change a name – companies change names constantly, usually to distract from something. The clarity to establish that the brand and the services were separable, that only one of them was an asset, and that a company may keep paying for the useful half while declining to pay for the half its customers had turned into an insult.

The Australian business reached the opposite conclusion. It continues to pay, to a substantial shareholder, for a name that has since delivered no postpaid net growth, a sliding prepaid base, and – on this masthead’s reading of the disclosures since the 2010 peak – well over a million fewer services than the brand carried before the failure that named it.

One company worked out that the name cost more than it was worth. The other still writes the cheque.

The Order of Operations

Here is the passage worth nailing above the desk of every telecommunications marketing department in the country.

Vodafone New Zealand did not become One New Zealand on day one. It waited years.

“Any brand transformation, it can’t be what you say. It needs to be what you have done. A genuine brand transformation is intrinsically linked with your strategy and the actions that you have taken.”

“I knew that what we needed to do before we changed our name was sort out our network, sort out our services, sort out our value and price points… So when we did rebrand, we did ask New Zealand to reconsider us, to give us another chance, and when they did experience us, they would go: wow, your network is way better, and your price points are way better, and your service is excellent.”

“So the name itself isn’t the hard piece. It’s the work that goes in before then.”

Fix the network. Fix the service. Fix the value. Then ask the market to reconsider you.

There is an alternative sequence, in which the claim is made first and the substance is invited to catch up. This masthead documented it in Post #81, where a seven-million-dollar result arrived dressed as a transformation. In Post #82, where a coverage map was redrawn by press release. And in Post #95, where a company that could not generate the proof commissioned it instead, from a firm whose own report noted it was “prepared solely” for that company’s use.

And in Post #74, where the claim was made by an American comedian.

Vodafone Australia’s recent campaigns have been fronted by Ali Wong, who is funny, successful, and from California. She was engaged to tell Australians that they need not pay more for what one creative described as a “big fancy pants telco experience” – an argument advanced on behalf of the carrier with the least coverage, to a country that has spent sixteen years complaining about precisely that.

One creative was withdrawn after the advertising regulator got involved. The audience response to the others is available in the comment sections and is not favourable.

Post #71 counted the agencies. Eight in seventeen years, and a ninth now in the chair. Mumbrella has described the account as one of the most difficult in the market, which is a considerable statement about a brief rather than about any of the nine.

Because that is the point, and it is Paris’s point. A campaign is a claim. The agencies are being asked to say the thing that the network, the service and the price have not yet earned – and no amount of casting can close that gap. Nine agencies have now attempted it. The tenth will be given the same brief.

Paris said none of that. He was describing his own company, and the application belongs to the reader. But it is worth noticing that the order he insisted on is the order the other business inverted, and that the results are now six years apart and available in both sets of accounts.

The Handbrake

One further passage, delivered by a man who spent eight years running the business that did not report to the market every six months.

“Private equity is all about enterprise value over the medium to long term, and then sometimes they will trade off any-year value and reinvest that for even more value creation in the out years. And it’s quite difficult for some publicly listed companies to be able to achieve.”

“It’s a real handbrake for organisations that only have a single measure of success, and that is the next 12 months, without actually looking at what that result means for the next 5 to 10 years for the business.”

This masthead has run a version of that argument for two years: in Post #92, on the assets sold to fund the present; in Post #97, on receivables sold forward, bought back with the proceeds of the towers, and sold forward again; in Post #91, on a scorecard that paid 87.64 per cent of maximum in the seven-million-dollar year.

It is a more persuasive argument coming from someone who ran the alternative. And the alternative did not merely distribute cash. Earnings went from around $463 million at acquisition to roughly $600 million, which is a hundred and forty million dollars of operating improvement, and no amount of asset-shuffling produces that.

Paris also described what his board did with him. It would “pull me back in when I was trying to take too much risk” and “push me when I was a bit tentative to go even harder and be even braver.”

A board that does both is a board. A board that adjusts the target to match the outcome is a mirror, which is a subject this masthead covered in Post #97, and one that no amount of remuneration consulting has ever improved.

Boxed In

Post #94 gave the Australian position its proper name. Zugzwang: the chess position in which every available move loses, and passing is not permitted.

Observe only what is disclosed. A dividend that has run ahead of earnings. Capital expenditure trending down. An underlying business that produced seven million dollars. Spectrum renewals ahead. A return on invested capital the company itself puts below its own cost of capital. And a board of ten on which four directors are associated with the two substantial shareholders, one of which also receives the brand licence fee.

None of that is a crisis, and none of it is asserted as one. Nominee representation is what nominee directors are for, and every arrangement described is disclosed. It is simply the shape of a company with fewer moves available than it had, whose largest holders are structured to be paid whether the rebuild happens or not.

And the register has been offering its own commentary.

This masthead set out in Post #77 what happened when Washington H. Soul Pattinson left. A house that has paid a dividend every year since 1903, and had held TPG for five and a half years, sold more than $650 million of stock in a matter of weeks – enough to take it below the substantial-holder threshold – and its board representative did not seek re-election at the following annual meeting.

Institutions of that vintage do not usually move at that speed. They accumulate over decades and exit over years, and their entire reputation rests on never needing to hurry.

This one hurried.

No reason was given, none is required, and none is asserted here.

But when the most patient money in the country stops being patient, the interesting question is not what it knew. It is what it decided it was no longer prepared to wait for.

Paris had eight years, an owner that wanted the asset improved, and a board that pushed him to be braver. The comparison is not that one executive is better than another. It is that one of them was given a hand with cards in it.

The Question He Declined

This masthead put the question to him directly. Both businesses were, in the 1990s, among the stronger-performing operations in the Vodafone Group. Same parent, same brand, same formula written in the same head office. Both met the smartphone at the same moment. Both emerged damaged.

So what, he was asked, did New Zealand get right that Australia did not?

He named three Australian chief executives, praised each of them, listed the sector’s failures without favour, and suggested the industry be given a break.

Now consider the man giving that answer.

This is an executive whose entire professional signature is the refusal to be diplomatic. He put “Dear Vodafone, you suck” on a screen in front of his own staff. He read out hate mail addressed to him personally. He published his email address to a country that had been complaining about his company for a decade, and he still reads what arrives. He has spent eight years being the most conspicuously blunt operator in Australasian telecommunications.

And on one question, he discovered tact.

He is entitled to it. A chief executive starting a new job next month does not spend his final week settling accounts with peers he will be sitting beside for the next twenty years, and nothing about the answer was dishonest. He plainly likes the people he declined to criticise.

But note what the generosity does to the argument, because it is not a softening. A competitor’s chief executive with a grievance produces a quote. A departing chief executive with nothing to gain, complimenting the people he is implicitly outperforming, produces a benchmark. He is not comparing himself to anybody. He is describing what he did, in order, and the comparison assembles itself without his assistance.

Which is the least answerable form of criticism there is: the kind that was never made.

Where the tact arrived is the interesting part. Not on network failures – he listed those. Not on the industry’s shortcomings – he named them. Not on his own company’s inadequacy – he had a slide made about it.

The single subject on which the most candid man in the room became careful was the comparison between what he did and what was done in Australia.

One does not require an answer when the shape of the silence will do.

Because he had already given the answer, in some detail, across the preceding hour. The anchor. The permission. The thousand conversations. The three things, fixed in order. The name paid for, and then not paid for.

Same brand, same owner, same playbook, same damage from the same decade. One of them fixed it. The other did not.

What separates them is what each was allowed to do about it, and in what order.

The divergence is the finding, and the man best placed to say so was far too polite to.

Marking the Other Paper

Paris supplied a diagnostic. He was talking about his own company. It applies to the other one anyway.

Network. TPG‘s 5G standalone rollout has been, on the observable evidence, uneven. Hundreds of suburbs sit in the gap between native metropolitan coverage and the Optus network-sharing footprint, which is to say they are served by an arrangement rather than by infrastructure. Genuine blackspots persist in places that are not remote – stretches of Picton Road, Wisemans Ferry, and a list of others that customers maintain on public forums because the company does not.

Service. Complaint handling is substantially offshored. The ombudsman’s published data has Vodafone‘s complaints rising by twenty-four per cent year-on-year in the December 2025 quarter while Telstra fell sixteen and Optus fell eighteen – a divergence of some forty points against both competitors in a single quarter, and the trend has not corrected since.

Value. Post #94 recorded four price changes in a fortnight, and then a reversal. Post #98 recorded a base being told the change would save it money. The Vodafone premium plan has, at points this year, sat above the equivalent Optus product, which is an unusual position for the brand in third place.

Three for three, on the diagnostic supplied by the man who fixed the other one.

Two of those three cost nothing to fix.

Network takes capital. It takes years, it takes towers, and it cannot be conjured in a reporting period – and TPG is reducing capital expenditure while maintaining a dividend that has run ahead of earnings.

But service and value are not capital projects.

Answering the telephone requires no spectrum. Publishing a price the customer can understand requires no board paper. Reading what customers write about you costs precisely nothing, and Paris has been doing it for eight years on an inbox anybody can email.

Of the three things Paris identified, the two that live in the operating budget have not been fixed. And the third, which needs capital, is having its budget trimmed to fund a dividend the earnings do not cover.

Some of that dividend flows to a shareholder which is also collecting a licence fee for the name.

The anchor, one notes, is still attached. It simply invoices now.

The Comparison Nobody Has To Make Out Loud

Place the two businesses side by side and observe only the public record.

One was told by its customers that it sucked. It said so back to them, in writing, on a screen, to its own staff. It then spent several years on the network, the service and the price, kept the parts of the group relationship that were worth paying for, stopped paying for the part that wasn’t, and only afterwards asked the country to reconsider it under a name it owned. It now has the satellite service, the distributions, and a chief executive who left on his own timetable.

The other kept the name.

That is not a criticism of any individual, and Mr Paris would object to it being read as one. It is an observation about sequence, and about enterprise value – which is the measure Paris returned to repeatedly, and the one on which the divergence is not a matter of opinion.

It is on the public record, in both sets of accounts, and it is six years wide.

The mirror, as Steve Hansen told Paris and Paris told this podcast, never lies.

It simply waits.

Right of Reply

TPG Telecom Limited, Vodafone, Vodafone Group plc, Hutchison, One New Zealand, Infratil, Washington H. Soul Pattinson, Telstra, Optus, and any director, officer or individual who considers themselves referenced in this article are warmly invited to correct, clarify, or add context to anything set out above – including, should they wish, the quantum and terms of any brand licensing arrangement.

Verified responses sent to vodafailed@gmail.com will be published in full and without editorial amendment. The address is published, monitored and answered, which is a practice this masthead borrowed from a chief executive who has been running it for eight years and reads every one. No licence fee was payable.

Disclosure, Disclaimer & Legal Notice

This article is independent commentary, opinion and analysis on a matter of public interest.

Statements attributed to Jason Paris are drawn from an interview recorded for The Ryan Tan Show and are reproduced from that recording. They are his statements about the business he has led and the industry in which he has worked, are quoted in context, and should not be read as commentary on any other company’s specific circumstances. Mr Paris made no criticism of TPG Telecom Limited, of Vodafone in Australia, or of any Australian telecommunications executive. He expressly spoke favourably of the current chief executives of all three Australian carriers, and expressly urged that the industry be given latitude. Every comparison drawn in this article between the New Zealand and Australian businesses is the author’s own analysis and inference. None of it is attributed to Mr Paris, none of it was invited by him, and none of it should be read as his view.

The brand licence. The quantum of any brand licensing fee payable by TPG Telecom Limited is not separately disclosed in its public filings. The percentage-of-service-revenue convention referred to is a general market convention, and any resulting figure is an external estimate which this masthead has not verified, does not assert, and which should not be relied upon. Brand licensing between a company and a substantial shareholder is an ordinary and lawful commercial arrangement. No allegation is made, and none should be read, that any such arrangement is improper, is other than on arm’s length terms, or has not been properly disclosed.

Board composition and related parties. References to directors’ associations with substantial shareholders describe matters disclosed by the company in its own filings. Nominee representation is ordinary and lawful. No allegation is made, and none should be read, that any director has failed to discharge any duty owed to the company or its shareholders, or that any related-party transaction was improper. Observations as to the structural incentives such arrangements create are the author’s honest opinion, reasonably held.

Ownership and market speculation. References to reported speculation concerning the intentions of Hutchison and Vodafone Group plc in relation to their Australian holdings describe matters reported in the financial press. This masthead does not assert, and does not know, the intentions of either party. No inference should be drawn that either has decided to dispose of any holding, and nothing here constitutes information about any actual or proposed transaction.

The Soul Pattinson disposal. The disposal described is drawn from public filings, including the substantial holder notice lodged at the time, and from this masthead’s prior published analysis in Post #77. No reason for the disposal has been publicly stated, none is asserted here, and no inference should be drawn as to the reasons of Washington H. Soul Pattinson or of any of its directors. The decision of a director not to seek re-election is a matter for that director. No criticism of any individual is made or intended.

The Huawei guidance. References to the 2018 Australian government security guidance describe a matter of public record. This masthead expresses no view on the merits of that decision, makes no criticism of any government or agency, and makes no assertion regarding Huawei or any of its equipment beyond the commercial consequences described.

Financial and operational figures concerning One New Zealand, Infratil and the 2019 transaction are drawn from public disclosures and reporting and are subject to verification; readers should consult the primary sources. Figures concerning TPG Telecom Limited are drawn from that company’s own filed financial statements and from this masthead’s prior published analysis. Historical characterisations of either business’s competitive position are drawn from contemporaneous public reporting. The comparison of current services in operation against a 2010 peak is the author’s own reading of successive disclosures across a period in which reporting segments and brand-level disclosure have changed materially, and is offered as such rather than as a like-for-like measurement.

Characterisations of strategy, sequence, incentives and corporate approach are the author’s honest opinion and reasonable inference drawn from publicly observable material and from the interview quoted. No allegation is made, and none should be read, that TPG Telecom Limited, Vodafone, Vodafone Group plc, Hutchison, Washington H. Soul Pattinson or any related entity or individual has engaged in misleading conduct or breached any law, regulation, code or standard. All entities and individuals retain the presumption of lawful conduct unless a competent authority determines otherwise.

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) and its state equivalents.

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, Vodafone Group, Hutchison, One New Zealand, Infratil, Brookfield, Washington H. Soul Pattinson, Telstra, Optus, Huawei, Les Mills International 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. The author holds no interest in One New Zealand, Infratil, Washington H. Soul Pattinson, or any other entity named in this article, and received no payment or consideration in connection with the interview quoted. 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