Vodafone posts $124M loss after 30 per cent improvement

Vodafone posts $124M loss after 30 per cent improvement

Blames historical losses from the network

Iñaki Berroeta (Vodafone)

Iñaki Berroeta (Vodafone)

Credit: TPG

Vodafone Hutchinson Australia (VHA) has reported a loss of $124 million for the full year ended 31 December 2018, which is a 30 per cent improvement from last year's $178 million loss.

VHA attributed the result to historical losses from the network and ongoing significant capital and spectrum costs.

In December 2018, a TPG-Vodafone joint venture (Mobile JV) paid $263 million for 131 lots in the spectrum to be used for the delivery of 5G services in Australia.

On the TPG merger, CEO Iñaki Berroeta said it provides the best opportunity to take competition to the next level.

“If we’re going to continue to see consumers benefit from improved technology and better value plans, there needs to be an even stronger third player with the scale to increase investment,” he said.

“With the next generation of mobile network just around the corner, there’s never been a more important time to ensure Australia has effective 5G mobile competition.”

TPG revealed earlier in the week that it reduced the value of spectrum licences its holds by $92 million and will write-down $76 million in capital expenditure associated with the now-halted roll out a mobile network.

This was roughly a month after the telecommunications provider said it stopped the rollout of its mobile network in Australia due to factors outside its control, or a result of the Government blocking Huawei from providing 5G equipment in Australia.

Meanwhile, Vodafone has now more than six million mobile customers, after adding 211,000 new customers during 2018. The company also has 33,000 customers on NBN.

The revenue for the year was up by 5.5 per cent to $3.6 billion, the growth was attributed to an increase in handset revenue and a "modest lift" in service revenue.

Vodafone's parent company, Hutchinson Telecommunications Australia, which is publicly-listed on the ASX, closed 2018 with $4.5 million profit, an 111.9 per cent increase from 2017 when it posted $37 million loss.

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