Tuesday, 31 July 2018 18:51

VHA subscribers climb to 6 million, but financial losses continue Featured

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VHA CEO Iñaki Berroeta VHA CEO Iñaki Berroeta

Vodafone Hutchison Australia chief Iñaki Berroeta is buoyant about the telco’s latest financial results and an increase in its mobile subscriber numbers to six million in the face of “significantly increased” market competition and continued hefty financial losses.

Speaking on Tuesday with the release of results for the six months to the end of June 2018 — including a year-on-year loss increasing to US$92.3 million — he said to maintain momentum the company would continue to invest heavily in its network and technology.

Responding to the impending entry of TPG into the mobile market, Berroeta indicated he was not phased by new entrants, with VHA’s aim being “to continue to deliver good services and to be more attractive to the market than competitors regardless of the entry of new players”.

“We always enter markets where there are lot of players. We look at what our customers want and continue competing. The level of competition in the past two years has increased signifcantly without the entry of anyone,” Berroeta noted.

In its results announcement, VHA says that in the six months to 30 June, it continued to strike a good balance between achieving solid growth and offering “high-quality, competitive services as customer demand for data reaches new highs”.  

vodafone two

VHA says it responded to continued increases in data demand by ending excess data charges with its Red Plus plans, and the expansion and enhancement of its Vodafone NBN services.  

The telco reported that in the 12 months to the end of June, customers used 288 petabytes on its mobile network, up 42% on the previous corresponding period.

And on the telco’s plans for 5G, Berroeta confirmed VHA was conducting a number of trials of the technology on many fronts and 5G would be available to customers when “the whole ecosystem” was ready.

He said significant work on the network was underway and expected a start-up of 5G at the end of 2019 or the beginning of 2020.

Headline results reported by VHA included:

  •     Total mobile customer base grew by 294,000 customers to 5.98 million, a 5.2% increase YoY
  •     Total revenue increased 7.1% YoY to $1768.8 million
  •     EBITDA increased 6.8% YoY to US$509.7 million
  •     ARPU was US$36.24, a 2.9% decrease in a direct YoY comparison (follows re-classification of Lebara and Kogan)
  •     Leading Net Promoter Score among Mobile Network Operators
  •     Driven by increases in depreciation and amortisation costs following 2017 spectrum licence purchases and accounting changes, VHA loss increased 16.9% YoY to US$92.3 million.

Berroeta said the half-year performance was built on the company’s long-term, sustainable growth strategy.

“I’m very proud of our track record of reliability, stability and a fantastic customer experience,” he said.

vodafone one

“We have the highest NPS among the MNOs, our mobile network is world-class, Vodafone NBN has launched successfully, and our business continues to grow in a highly competitive market.  

“Over the next six months, we’ll continue to evolve our mobile network, including 5G preparations, grow our Vodafone NBN business and drive further value and product simplification for customers.”

Acting chief financial officer Sean Crowley said the results were pleasing and in line with expectations.

“In a competitive market, VHA has added 294,000 mobile customers year-on-year, with growth driven by post-paid and pre-paid segments, including non-Vodafone branded customers,” Crowley said.  

“Our Red Plus plans, which remove excess data charges, are already taking a strong share of connections and upgrades. Growth also continues to be driven by our popular $5 Roaming and no lock-in handset plans.”

Crowley said Vodafone NBN was performing to expectations, following VHA’s entry into the fixed broadband market in December 2017.

“After a measured launch to ensure the customer experience is right, we have now ramped up distribution and marketing of fixed broadband services.  

“Connections are going well, with customers attracted to the peace of mind offered by VHA’s 4G back-up modem.”

Crowley said global accounting changes, effective 1 January for VHA, affected when the access service discount was recognised.

“The new standards don’t impact the amount of revenue collected from customers, just the period in which any access service discounts are booked,” he said.

“Where these discounts occur a greater amount is now recognised earlier in the contract. However, despite this, our revenue and EBITDA continues to trend upwards.”

Graphics: courtesy Vodafone Hutchison Australia

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Peter Dinham

Peter Dinham is a co-founder of iTWire and a 35-year veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).

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