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Vodafone Australia's customer and revenue decline continues

Amid a tough half year for the global brand, Vodafone Australia has continued to see a decline in its revenue and customer base.
Written by Josh Taylor, Contributor

In Vodafone's global half-year results ending September 30, 2012, the company reported a global net loss of US$3.18 billion, citing tough market conditions in Europe, but Australia is also an ongoing issue for the company.

Australia, which falls under the Africa, Middle East, and Asia-Pacific grouping of Vodafone companies, reported a 14.4 percent decline in service revenue for the half year. The company said that this was caused by "weakness in brand perception" and cuts in mobile-termination rates.

As Vodafone Hutchison Australia (VHA) is a joint venture between Vodafone Group and Hutchison Telecoms, each company only reports half of the customer gains or losses in its respective financials. Vodafone said that during the quarter between June and September, it lost 77,000 customers, VHA shed a total of 154,000 customers, declining the company's customer base to 6.35 million customers in total. Overall, the company has shed more than 1 million customers from its high of 7.5 million back in 2010.

For its part, VHA has sought to address its ongoing decline — which began with network and customer-service issues almost two years ago — by implementing a major overhaul of not only its network, but also its operations. The company announced last month that up to 10 percent of its workforce will go in a restructure of VHA.

The company's "Mr fix-it" CEO Bill Morrow appointed a number of new executives, including James Marsh as the new CFO, Brad Whitcomb as the company's director of strategy, transformation and business development, Cliff Woo as the new chief technology officer, and Kim Clarke as the director of the consumer business unit.

The leaner company will be looking to turn around its fortune in early 2013 with the launch of 4G long-term evolution (LTE) services in metropolitan areas of Australia, in a time when its two major competitors, Optus and Telstra, shift from a strategy of customer acquisition to customer retention.

While the company is struggling in Australia, the global group seems much more concerned with risk surrounding the Eurozone, in particular for cash and liquid investments in countries within the Eurozone.

"Conditions in the Eurozone have resulted in a higher risk of disruption and business risk from high currency volatility and/or the potential of an exit of one or more countries from the euro," the company stated in the report.

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