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Vodafone Australia grows customer base and losses

First half 2015 results for Vodafone Hutchison Australia have signalled a slight growth in customer base, but an increase in losses.
Written by Corinne Reichert, Contributor

Vodafone Hutchison Australia (VHA) has released its results for the first half of 2015, announcing a net loss of AU$259.6 million.

The results (PDF), released on Tuesday afternoon, also announced a slight increase in its post-paid customer base, which grew 3.3 percent year on year in the half ended June 2015 to 3.1 million. Prepaid customers grew marginally, up 0.1 percent to almost 1.7 million.

The company reported total revenue of AU$1.77 billion, a year-on-year increase of 2.9 percent.

VHA CFO James Marsh said the company is "pleased with our performance in this seasonally quiet period for the market", attributing the customer growth to its post-paid Red plans, SIM-only plans, partnership with Spotify, and AU$5 roaming options. Total network customers reached around 5.3 million, a 0.8 percent increase from the same period last year.

Gross average revenue per user (ARPU) increased by 2 percent year on year to AU$51.32, with Vodafone identifying that more customers have opted for its higher-end Red plans.

Marsh attributed the company's loss to acquisition costs, the offer of cheaper international calling and data options for customers, a higher debt due to a number of its liabilities being held in unhedged US dollars, and increased competition.

"We have seen a step up in competition across both the mobile network operators and the MVNOs, particularly in prepaid," Marsh said on Tuesday.

"Our seasonal decline, though, has been at its lowest levels for many years, and we're in a good position for growth in H2.

"We see that [customer base] growing going forward."

Marsh said MVNO customers had dropped over H1, owing to acquisitions by competitors and subsequent customer migrations. MVNO revenue has nonetheless remained stable over the six-month period, according to the CFO.

By comparison, the financial year ending 2013 saw the company lose 1.23 million customers. It has lost hundreds of thousands of customers every year since FY10, when it gained 681,000.

Vodafone Australia's Q1 2015 results were the first to show revenue growth in several years, with the company reporting 1 percent growth in revenue for the first three months of the year, compared to a decline of 1.3 percent in revenue in the last three months of 2014.

VHA's primary competitors Optus and Telstra have yet to report their H1 2015 results. However, in May, Optus reported adding 42,000 net new customers in the first three months of the year, and Telstra, which does not report quarterly results, added 366,000 customers to its mobile network in the last half of 2014.

VHA would not disclose its forecast for the remainder of the year.

Updated at 10.30am AEST, August 1: This article incorrectly stated that VHA's loss was AU$183.6, when it was actually AU$259.6 million due to joint venture accounting adjustments.

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