Vodafone loses more customers

Vodafone NZ CEO Russell Stanners

Vodafone New Zealand's customer count fell a net 6000 to 2,314,000 during the three months to December 31, 2012 (the third quarter of its financial year), according to figures released by its UK parent overnight.

The carrier still holds a big lead over rivals Telecom and 2degrees, but its total mobile connections have slipped more 100,000 over the past 12 months, and 170,000 over the past 24 months amid six straight quarters of customer losses.

The latest standings:

TOTAL ACTIVE MOBILE CONNECTIONS*

Vodafone: 2.31 million (46.96%)
Telecom:  1.57 million (31.78%)
2degrees: 1 million (20.24%)
TelstraClear/MVNOs: 50,000 (1.01%)

Vodafone (and Telecom's) traditional spin is that they are losing low-value pre-pay customers to fast-growing 2degrees.

That theory has been backed by falling pre-pay numbers. Vodafone's percentage of customers on prepay - around 70% when 2degrees launched - has been falling every quarter since the newcomer launched. But for the three months to December 31, it actually edged up, from 66.2% to 66.6%.

New acquisition TelstraClear accounts for almost all of the 50,000 or so "mobile virtual network operator" (MVNO) customers - (for TelstraClear Mobile is a rebadged version of Vodafone's 3G service). Historically, Vodafone hasn't included TelstraClear Mobile customers in its total. The deal to buy TelstraClear closed on October 31, a month into the December quarter. It was not immediately clear if the 50,000 TelstraClear customers were included in the total. [UPDATE, a Vodafone spokeswoman told NBR this morning: "The quarter three customer numbers do not include data from TelstraClear, or M2M [machine-to-machine] connections."]

As the buyout was made official on October 31, Vodafone said it would TelstraClear as a separate business unit for five or six months. TelstraClear branding would be phased out altogether in about 18 months.

In August last year, Telecom reported a mobile "reset" as it closed down its old CDMA network, shedding hundreds of thousands of customers from its total and claiming they were dormant in any case (begging the question of why they were ever included in its active customer total).

Beyond the inactives, many CDMA customers strayed to Vodafone or 2degrees rather tan upgraded to XT.

2degrees rising
Also in August, 2degrees said it had hit the 1 million customer milestone, with 100,000 customers on contract. 

Last week, the carrier said data use on its network tripled over the past year. However, it would only waffle in percentages, refusing to give NBR any hard update on its customer numbers (2degrees is privately held, and thus free from the detailed reporting requirements imposed on its competitors).

Vodafone has lately been pushing a Dual Carrier upgrade to its 3G network, which suits high-end smartphone users, but has also been jabbing pack in the pre-pay market, where all three of the major carriers are now offering keen $19/month packages.

Weaker than expected global result
Vodafone PLC does not break out quarterly financial results for its New Zealand subsidiary.

Vodafone NZ recently files full-year result for the year to March 31, 2012 with the Companies Office. Net profit rose to $175 million from $151.5 million a year ago on revenue fell that fell 4.3% to $1.62 billion.

Vodafone PLC delivered a disappointing worldwide result for its December quarter. Organic service revenues, which exclude items like handset sales but include calls, texts and data, fell 2.6%, worse than the expected 2.4%. The company was hardest hit in Europe, where the financial crisis and regulatory changes saw a double-digit drop in revenue in several countries.

ckeall@nbr.co.nz


* Companies count each mobile connection, not each individual customer - so a person with a work cellphone, personal cellphone, tablet and GPS each with their own SIM card would count as four connections, for example. While Telecom and Vodafone, as listed companies, have to release detailed customer numbers, privately-held 2degrees sticks to general numbers. Telecom, Vodafone and 2degrees count mobile connections as those that have been used in the past 90 days.

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8 Comments & Questions

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@kiwibrew

At a 2011 TUANZ conference Vodafone boasted of 500,000+ Machine to Machine (M2M) connections on their network. These low cost, low data volume accounts sit with Coke machines, building HVAC, and vehicle GPS tracking devices.

I think these M2M connections inflate Vodafone's subscriber figures significantly.

2Degrees might also be in the same boat if they have a similar wholesale data service. Telecom is the least likely to have inflated numbers as their service is 3G only and doesn't support some of the low-cost equipment used in M2M connections.

It'd be great to get a more realistic picture of market share (by minutes or megabytes perhaps) from our cellular carriers.

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A Vodafone spokeswoman told NBR this morning:

"The quarter three customer numbers do not include data from TelstraClear, or M2M [machine-to-machine] connections."

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They said they dont count the m2m numbers in total subs.

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Vodafone has a huge contract with a power co for power meters up to 1 million and was the largest M2M contract in the world also I see the loss of customers is dropping,

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A Vodafone spokeswoman told NBR this morning:

"The quarter three customer numbers do not include data from TelstraClear, or M2M [machine-to-machine] connections."

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There are more phones than people in the country. A better measure might be for everyone in the country with dual phones to nominate who their main mobile carrier is, thus taking out the duplications. THEN we'll see what's really going on!! Of course that's not possible, but it would settle the numbers a bit.

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Why is market share so important? Surely profit is what matters?

Would you rather make $175m on 60% market share or $200m on 30% market share?

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You can't pay the bills with market share!

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