Vodafone lost 27,000 customers in September quarter
Vodafone New Zealand lost 27,000 customers in the three months to September 30 according to a footnote in global results released this week.
The telco finished the quarter with 2,484,000 customers. In the previous quarter, it had 2,511,000 (to Telecom's 2,250,000 and 2degrees' estimated 100,000).
It was Vodafone’s first reversal after at least seven straight quarters of customer growth.
Some of Vodafone's customers will have gone to its growing fleet of mobile virtual network operators (MVNOs), who sell a rebadged version of the telco's service. CallPlus, which is easily the largest MVNO, last week told NBR it has signed 1000 customers across CallPlus Mobile and Slingshot Mobile.
2degrees launched on August 14. By one analysts estimate, it now has 100,000 connections - although an unknown number have get a dual Telecom or Vodafone sim card, and being all pre-pay, its number is volatile.
And Telecom, buoyed by XT, had a net gain of 64,000 mobile connections, raising its total to 2,250,000 mark (see table below, courtesty Forsyth Barr).
Vodafone is the most vulnerable of the two big networks to 2degrees, because of its high percentage of prepay customers, and the fact the two telcos' networks share the same 3G frequency - meaning customers don't have to buy a new cellphone to switch.
The overall picture is of a growing market, something the Commerce Commission has confirmed with figures released yesterday, which showed cellphone penetration - thanks to owners of multiple mobile devices - reaching 110% of the population.
As usual, the UK-based Vodafone PLC did not release any half-year financials for its full-owned New Zealand subsidiary, which is part of a quirkily defined “Asia Pacific and Middle East" group (a full-year result is filed; for the year to March 31 2009 Vodafone NZ had its first profit drop in eight years with earnings falling 7.2% to $178 million).
Fewer on pre-pay
By the close of the quarter, 70.8% of Vodafone NZ's customers were on prepay plans. In the year-ago quarter, the percentage was 72.5% (Telecom's prepaid percentage was 60.8%).
The change indicates that customers lost to 2degrees are in the pre-pay segment, which yields less average revenue per month than post-paid contract customers.
Previously, Vodafone NZ chief executive Russell Stanners has told NBR that while his company's average prepay revenue is around $20 a customer, a high number of what he called "glovebox customers" (those who usually only take calls, not make them) meant the median was closer to $10.
Cost cutting drive
Mid week, Vodafone announced that its global half-year profit had increased by 2.4% to £5.9 billion.
The company said its full-year operating profit would be at the upper end of its previously stated £11 billion to £11.8 billion range.
Chief executive Vittorio Colao said Vodafone is now looking to save £2 billion in costs by 2012. The savings will be achieved through smarter use of technology, in part, but that job cuts were "inevitable".