Vodafone has fewer than 5 million customers

Vodafone has fewer than 5 million customers

Summary: Despite signs of a turnaround, Vodafone has continued to shed customers in the first quarter of 2014.

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TOPICS: Telcos, Australia
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Vodafone's mobile customer base has dropped below 5 million for the first time since the merger of Vodafone and 3 in 2009, despite hopes that the company would return to customer growth at the start of 2014.

According to results out from Vodafone's joint parent company Vodafone Group, the company shed another 44,000 customers in the three months from January 1, 2014, through to March 31, 2014. This saw Vodafone's mobile customer base drop below 5 million to 4.96 million.

Despite strong comments from former Vodafone CEO Bill Morrow that 2014 would be the beginning of the turnaround for the Vodafone business, the customer losses in the first quarter of 2014 were double those of the last quarter of 2013.

The result saw Vodafone record a 9 percent decline in year-on-year service revenue, but this was an improvement on the previous 13 percent decline in year-on-year service revenue for Vodafone. Quarter-on-quarter, it was a 1 percent higher decline in revenue.

For Vodafone Group's financial year, Vodafone Australia reported a drop in customers of 1.04 million.

While the numbers are an improvement for Vodafone, year-on-year, the company is still losing more customers than Optus, while Telstra is still adding new mobile customers according to its last results.

From Vodafone's perspective, the company now sees itself in a strong position for growth, with cost cutting leading to a 14.8 percent increase in earnings before interest, tax, depreciation and amortisation (EBITA), year-on-year. Vodafone has also cleared its inactive SIM backlog meaning the customer numbers today more closely reflect the true number of Vodafone customers.

But the company is taking a more reserved approach about its return to growth, instead indicating that there would be good and bad quarters for the company in the next year, with strong profitability overall.

Topics: Telcos, 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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6 comments
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  • Same story getting retold

    One wonders when a real analysis of the Vodafone situation will be done by journalists or analysts that are willing to push beyond the continuing "good news" rhetoric from Vodafone executives. Its seems just about all of the tech journos were happy to swallow the line that Morrow ran when he was in charge and even at his departure and yet every time we see real numbers (thank goodness for the UK listing of Voda PLC) the words don't match the reality. If you breakdown the numbers since Morrow took the chair the losses accelerated both in subs and revenues. Costs were contained primarily by firing a fair chunk of the workforce but customers continue to leave. And still Vodafone executives have their heads in the sand. You don't lose customers in March 2014 because of something that happened in 2010!!! It is ridiculous for anyone to still spin that line. Vodafone still do not have the coverage, plans, service to match either of their competitors and that is why customers are still leaving but because those running the business will not accept that then they won't change it. Under 5 million customers means that the merger between 3 Mobile and Vodafone would have to be the most spectacular failure in the history of mergers!
    Wazza11
  • Vodafone is gaining market share

    This article is misleading as it's only related to one of the around 60 countries Vodafone operates in, and it doesn't clearly say which one, but I guess it's Australia.

    Vodafone has actually a healthy market share with its more than 400 million customers. This article makes it sound like the company is doomed because it this year lost 44 000 customers in one market. But, as the author writes at the end "Vodafone has also cleared its inactive SIM backlog meaning the customer numbers today more closely reflect the true number of Vodafone customers." Hmmm... so it turns out this is not actually thru either.

    I guess it's just ZDNet' quality control that fails again and the need for dramatic headings to have more clicks. Next week Josh Taylor might publish an article about how doomed Apple is, as its down to its last customer (in the house Josh lives in).
    reidar76
    • Did you read the Article?

      If you read the article you would see it refers to Vodafone Australia as well as in the first sentence mentioning it relates to the merged entity of 3 and Vodafone which again is the local group. As to Vodafone globally it has seen a record decline in its revenue over the past 18 months with the latest results showing a service revenue drop by 3.8% so rather than bag ZDNet I'd suggest you first read the articles.
      Wazza11
      • Why?

        Excellent article and reply - and I keep asking WHY?
        I do know that if I had not fell for the Vodafone spiel on the new iPhone 5s I would not be locked into a two year contract on two phones. It leaves a very bad taste in my mouth and severe cognitive dissonance with Vodafone.
        At the very first opportunity I will churn my account to another provider and dump Vodafone.
        I tried to ask for assistance in two outlets in my local shopping centre - where I purchased both phone contracts - but it is like nailing jelly to a tree. Rotten service and opaque nerdy sales staff all about ten years old, who just do not relate to the older customers of the company that employs them. I would put a lot of Vodafone's problems down to training - in every part of the company. Don't think I have yet come across any Vodafone staff over thirty. Their brains haven't joined up yet.
        Dr. Ghostly
    • Yes, it does clearly say which one...

      You Sir, are a moron.
      Rick Deckard
      • Sir?

        Rick, of which "Sir" do you speak?
        Dr. Ghostly