TPG 'uncertainty' sees Vodafone losses soar

TPG 'uncertainty' sees Vodafone losses soar

Revenues also hit by “aggressive competition”

Credit: 38416505 © Tktktk

Vodafone Hutchison Australia (VHA) has reported an annual loss of $279.3 million after a year of turbulence surrounding its merger with TPG.

Despite closing the year ending 31 December 2019 with a further 124.5 per cent dip into the red, CEO Iñaki Berroeta remained positive about the company's prospects following the merger's recent approval

“The merged company will have a strong balance sheet, significantly improved spectrum and transmission assets, and increased cross-selling opportunities,” he said.

Earnings before interest, taxes, depreciation and amortisation (EBITDA) increased by 6.9 per cent year-on-year to $1.2 billion, while total revenue decreased year-on-year by 2.8 per cent to $3.5 billion.

Berroeta said he was pleased with the EBITDA result as the company’s strategy in 2019 was to focus on its commercial stability.

Meanwhile, the revenue loss was attributed to aggressive competition for new customers, according to Sean Crowley, acting chief financial officer.

He said that "the uncertainty we faced with the merger approval" with TPG necessitated a different commercial approach compared to its competitors.

“However, by improving device margins and managing our cost base effectively, we were able to mitigate against the decline in revenue and overall we estimate that our EBITDA market share, on a normalised basis, has increased through 2019," he said.

Mobile average revenue per user (ARPU) was also down by 4.9 per cent year-on-year to $33.4 million.

Its fixed customer base more than tripled, rising 245.5 per cent year-on-year to 114,000, while its total mobile network customer base decreased in the same period by 4.6 per cent to 5.7 million.

The change in customers aligned with VHA’s focus of maintaining its postpaid mobile based, rather than targeting aggressive customer growth, Crowley added.

Berroeta also said that he was excited to be pushing ahead with the company’s plans for delivering its first 5G sites alongside Nokia which will start with a roll out of over 650 sites and will be going live “within weeks” and will number in the thousands in the future.

To the future, the company's 2020 focus is on its 5G roll out and implementation of the merger, Berroeta said. “This will enable us to compete with confidence in the market and reverse the downward movements of 2019," he added.

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