Vodafone to challenge rivals with new tariff

Vodafone will launch a flexible tariff structure today aimed at fighting back in the competitive UK market. The mobile phone giant will back the new price plans with a marketing campaign worth more than £10m to compete with aggressive competition from its rivals.

Since the start of the year, Vodafone has struggled to keep pace with its competitors when attracting new customers in the UK. Earlier this year, T-Mobile invested heavily in its "Flext" tariff that has attracted 800,000 customers since March, while Orange has reorganised its tariff structure around its "Animals" campaign.

In a move that mirrors T-Mobile's Flext, Vodafone's new packages will give its customers more choice in selecting what inclusive services they get as part of their contract. The packages will be launched today under the "Your Price Plan" and "Your Extras" brands and will be backed by one of the company's largest ever UK marketing campaigns.

Vodafone customers who apply for the packages can choose the level of inclusive minutes, texts or data services they receive as part of a monthly contract, including mobile television and music downloads. For example, customers who opt to take an 18-month contract at £35 a month could choose to receive 750 minutes and 250 texts or alternatively 500 minutes, 500 texts and six months of free mobile television. The packages range from £20 a month to £75 a month and can be combined with other Vodafone tariffs such as "Stop the Clock" and "Passport".

Tim Yates, a director at Vodafone UK, said the contracts reflect a customer reaction against paying for services they do not want. "These packages are structured around giving customers services they can use," Mr Yates said. He said he expected the new flexible tariffs to drive market share gains in the UK but also to result in customers spending more on their contracts.

Mr Yates said Vodafone's retail partners will have control over how to combine different services around themes to sell as one package. He added that the packages are not designed to offer the cheapest deals in the UK. Many of the packages are priced at a premium to Vodafone's competitors, while other combinations will prove cheaper, depending on what services are included in the contract.