Vodafone Australia remains 'stable' despite half-year loss sliding to AU$153m

VHA CEO Inaki Berroeta remains optimistic even as the company continues to report declining numbers in revenue and ARPU.

Vodafone Hutchison Australia (VHA) has reported a net loss of AU$153 million for the half-year ended 30 June 2019, a further drop from the AU$92.3 million reported in the corresponding period last year.

The company also reported total revenue decreased 1.7% year on year to AU$1.7 billion, while average revenue per user (ARPU) was AU$34.52, a decrease of 5.2% year on year.

However, earnings before interest, tax, depreciation and amortisation (EBIDTA) increased by 14.3% to AU$585 million. 

Vodafone's total mobile customer base also grew by 11,750 customers to 5.99 million, equivalent to a 0.2% increase year on year. Although, these numbers are marginally down from the 6.02 million that was recorded from December 2018. 

Despite declines in revenue and ARPU, VHA CEO Inaki Berroeta said performance remained "stable in the face of significant headwinds". 

"We continue to focus on our customers and are investing in our digital capability to continually improve customer experience," he said.

"I am very pleased that our customer experience is reflected in the fact that we continue to set new standards as an industry leader in customer service. We have just recorded a new record low rate of TIO complaints – less than three per 10,000 customers – which is less than half the industry average."

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Hutchinson Telecommunications Australia, the publicly-listed entity that owns 50% of VHA, said in the second-half of the year the company would continue to finalise plans for a new network vendor after the federal government banned the use of 5G equipment supplied by Huawei and ZTE due to national security concerns. 

The first casualty of the ban was TPG, who disclosed that it would abandon its mobile network build in Australia, incurring an accounting hit of almost AU$230 million. 

Although that could potentially change if the proposed merger between TPG and Vodafone goes ahead, as a new and bigger TPG would see Vodafone's current network coupled with TPG's existing spectrum holdings. 

VHA stated the proposed merger is something the company would continue to push forward with, signalling that it was "pleased" the process has been expedited with a federal court hearing set for September 2019. This came after the Australian Competition and Consumer Commission (ACCC) opposed the deal in May. 

"The merger would create an entity that will increase our ability to invest in networks, new technologies, and even more competitive plans and products for Australian consumers," Berroeta said.

Earlier this month, VHA admitted to misleading customers over direct billing services and is set to offer refunds to impacted customers, after an investigation by the ACCC. 

The ACCC said Vodafone admitted it "likely breached the ASIC Act from at least 2015" when it charged consumers for content they did not knowingly purchase or agree to buy. The telco has signed a court enforceable undertaking, the consumer watchdog said.

Vodafone was paid commissions for sales of the ringtones, games, and digital content by third-parties, with the direct billing service enabled by default consumer accounts.  

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