Vodafone UK sales fall 10 per cent due to botched customer data migration

Bungled bills and downtime at Vodafone leads to customer exodus

Mobile phone giant Vodafone has seen UK sales fall by more than 10 per cent following the botched migration of customer data into a new Siebel customer relationship management (CRM) system. UK sales fell by 11.4 per cent to €1.84bn - Vodafone reports in euros rather than sterling - in the three months to the end of June.

Vodafone was upfront in blaming the fall in revenues on the botched migration, partly attributing it to "the impact of operational challenges following a billing system migration". However, it added that it had staunched the flow of customers, reducing consumer contract churn from 18.9 per cent to 15.5 per cent "supported by stabilising customer service levels".

The company made its admission as it reported its fiscal 2017 first quarter results this morning. The loss of customers following the botched data migration caps what appears to be long-running problems with its CRM system implementation.

Vodafone selected Siebel Systems back in October 2012, a contract win that was widely publicised by the software giant, standardising on Siebel globally. The new software was intended not just to service mobile customers, but also customers for fixed-line telecoms, data networking, television subscriptions and a range of other services.

"We have a very strong partnership with Oracle consulting services. They actually form the core of our centre of excellence that is working across multiple Siebel programmes across many countries," said Carl Bennett, head of CRM technology at Vodafone, back in 2012 when the deal was revealed.

That had following the purchase of an unlimited Oracle licence by Vodafone back in 2009, when the company decided to roll out the Siebel CRM system to enable it to configure new products more quickly and easily. "We concluded that it remains the best suite-product for us to use," said Bennett.

In addition to suffering from downtime, the system has also led to customers questioning their phone bills, continuing to be billed even after contracts had been cancelled, having their direct debits mysteriously cancelled, or being shut out of online accounts.

The level of problems with the system has been so great that it has even drawn intervention from Ofcom. The telecoms regulator launched its own formal investigation into Vodafone in January following a spike in complaints during 2015 as the system seemingly went from bad to worse.

Vodafone UK's incoming CEO, Nick Jeffrey, claimed that the billing debacle was due to the botched transfer of customer accounts to the new CRM system during 2015, and that it has now been sorted out. However, there is evidence that difficulties have been simmering for at least three years following the implementation, with reports of downtime and other problems going back to 2013.

Oracle acquired Siebel Systems for $5.85bn in 2005, the culmination of a long-running rivalry between Oracle founder Larry Ellison and Siebel founder Tom Siebel.