Vodafone Australia reports customer losses of 551K

Summary:Vodafone Australia's customer losses have continued in 2013, with over half a million customers leaving the company in the first six months of this year.

Vodafone Australia's parent company Hutchison Telecom expects Vodafone to begin to turn around towards the end of 2013, as the company has again reported massive customer losses for the first half of 2013.

Hutchison, which has a 50 percent stake in Vodafone in Australia with co-parent Vodafone Group PLC, today reported half-year losses of AU$95.8 million, which was an improvement on the AU$131.3 million loss for the corresponding period in 2012.

Total revenue was down to AU$1.7 billion from AU$2 billion in June 2012. Hutchison's share of Vodafone's net loss for the six months was AU$109.1 million, compared to AU$138 million in the first six months of 2012.

The company's customer base declined by 551,000 in the six months, down to 6.028 million. This indicates that in the second quarter of this year, Vodafone's customer base declined a further 335,000 on top of the 216,000 who left in the first quarter .

It represents an 11.9 percent drop in customers in the last 12 months, down from 6.8 million in June 2012.

It is understood that Vodafone deactivated over 100,000 inactive SIMs in the second quarter of this year, meaning that the customer loss remained relatively consistent over the six months.

Many of the customers who were leaving would have also have been signed up at the peak of the company's network woes back in 2011, and Vodafone expects that this will be the last before the company begins to see a reduction in the number of customers leaving the telco.

"The turnaround strategy anticipates customer losses to continue for the remainder of 2013, but our underlying churn rate is well within target, and our overall average revenue per user [ARPU] is on track," CEO Bill Morrow said in a statement.

"While there are continued challenges ahead and plenty of work still to do, I'm very confident about the future of Vodafone, and extremely pleased with the progress made."

Vodafone today said that the revenue losses are reducing year on year, and there has been a 68.9 percent increase in earning before interest, tax, depreciation, and amortisation.

In June, Hutchison and Vodafone Group refinanced Vodafone Australia with a two-year, US$3.5 billion loan. Hutchison in its results today said the company is confident that the strategic overhaul of the business that commenced in 2012 will bring Vodafone back.

"Although continuing losses are anticipated in 2013, [Hutchison] expects improvements in [Vodafone's] operating performance through the remainder of the year and into 2014," the company said in its report.

Vodafone last month launched its 4G network across several capital cities and regional areas in Australia. Earlier this week, the company received legal threats from Telstra over claims to have the fastest 4G network in those capital cities in light of the company's high spectrum holdings in the 1800MHz band.

Telstra has since said that restacking the 1800MHz spectrum band has given it similar spectrum holdings in all of the major capital cities, except Sydney and Melbourne, where the company has 5MHz less spectrum than Vodafone.

Topics: Telcos, 4G, Australia

About

Armed with a degree in Computer Science and a Masters in Journalism, Josh keeps a close eye on the telecommunications industry, the National Broadband Network, and all the goings on in government IT.

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