Crazy John's buffers Vodafone from downturn

Summary:Vodafone Australia's acquisition of Crazy John's has paid off, according to CEO Russell Hewitt, as the company recorded a net increase of around 110,000 new customers in the last quarter to 31 December 2008, but its average revenue per user has continued to fall.

Vodafone Australia's acquisition of Crazy John's has paid off, according to CEO Russell Hewitt, as the company recorded a net increase of around 110,000 new customers in the last quarter, but its average revenue per user has continued to fall.

The mobile service provider's customer base now stands at 4.2 million, up around 110,000 on the company's half yearly results reported last November. The results, which covered the quarter to 31 December 2008 were heavily influenced by the completion of its acquisition of Crazy John's, which added around 76,000 new customers, who since July became direct customers of Vodafone.

Hewitt yesterday boasted that Vodafone's latest figures had shown it was "resilient" to the economic downturn.

"No company is immune to recession, but Vodafone Australia has proven to be extremely resilient to date. During the Christmas quarter and beyond, Vodafone maintained an extremely keen position on price and value, which resonated well with customers," he said in a statement.

Customers acquired through Mobile Virtual Network Operator (MNVO) partners such as People Telecom, which it signed last year, stood at 305,000 — down 54,000 since November's report. A spokesperson for the company said the decline was due to Crazy John's customers now being included in its direct customer base.

"Crazy John's sales during Q3 exceeded all expectations, and our ownership of the company has already proven to be the right buy at the right time for Vodafone," Hewitt said.

The strategy behind today's results, according to Hewitt, was the company's focus on exclusive handsets, such as the iPhone and internet services.

"During Q3, Vodafone concentrated on exclusive handsets, mobile broadband devices, high-value plans and a powerful retail presence. As a company with many moving parts in retail, technology and customer service, we lined up in perfect formation and achieved excellent results in a softening market."

While exclusive handsets were viewed as an advantage, its iPhone offering had been a source of trouble due to claims it had massively over-billed some customers.

Despite the increased customer base, Vodafone's total average revenue per user (ARPU) has continued to fall, dropping 2.1 per cent for the quarter when compared to the same period last year. Vodafone Australia did not disclose ARPU figures in this report; however, it reported during the last quarter that its ARPU had fallen to its lowest levels in two years — an average of $48.7 across contract and prepaid customers: contract customers previously generated $88.4 per month while those on prepaid gave it $31.5 each per month.

Topics: Telcos, Mobility, Tech Industry

About

Liam Tung is an Australian business technology journalist living a few too many Swedish miles north of Stockholm for his liking. He gained a bachelors degree in economics and arts (cultural studies) at Sydney's Macquarie University, but hacked (without Norse or malicious code for that matter) his way into a career as an enterprise tech, s... Full Bio

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