Vodafone loses 554,000 customers in 2011

Vodafone loses 554,000 customers in 2011

The telco's customer base is now at 7 million


Around 554,000 customers walked out on Vodafone Hutchinson Australia (VHA) in 2011.

VHA is a joint venture between Hutchison Telecoms (ASX:HTA) and Vodafone Group. Hutchison Telecom has announced its full year results ending 31 December 2011.

The telco saw its customer base decline by 375,000 in the first half of last year. This slowed down to 179,000 for the rest of the year. The company did increase its postpaid customer base by 16,000 during that half year period.

VHA lost a total of 554,000 customers in 2011. The customer base currently sits at 7 million.

Monthly postpaid handset churn remained steady at two per cent. Average revenue per user dropped five percent to $51.34.

Hutchison Telecom reported a net loss of $167.7 million compared to a profit of $73.4 million in the previous corresponding period, a 328.3 per cent decline. Its share of VHA’s service revenue was down 7.1 per cent to $2,044.2 million.

Operating margin was also down at $1,510.2 million, a drop of 10.7 per cent.

With Hutchison Telecom only owning half of VHA, losses for the telco could be significantly higher than the figures reported.

VHA noted its network investments are on track.

Early last year, the telco said it would pour $1 billion into improving its mobile and data network after a flurry of complaints from customers. The network upgrade will be 4G compatible although VHA has yet to make any solid announcements on its LTE plans. It has now emerged the $1 billion investment was to be spread over three years.

The company wants to focus on improving performance and speeds for existing customers before it pushes out 4G LTE.

“Our new 850MHz network, built for data, is over two-thirds complete and is now delivering customers a better smartphone experience and we have introduced a network guarantee for new customers,” VHA CEO, Nigel Dews, said in a statement. “Our upgrade and equipment replacement program is also running at full pace and we have begun to integrate new sites into the network.”

There are currently more than 1000 sites live on the 3G 850MHz network with another 500 expected to be switched on by the third quarter of this year.

VHA also endeavoured to improve customer service significantly during 2011. It also began its foray into fixed-line services, signing up for the National Broadband Network (NBN) mainland trial. It already has a handful of customers live on the network in NSW and is expected to connect up services in Victoria in the coming months.

All this, including mobile network upgrades, has required heavy capital expenditure from VHA.

Capital expenditure is expected to remain high as the telco continues its network build right through the year.

In 2012, VHA wants to focus on clawing back customer numbers and reap the rewards of its investments.

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