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Vodafone loses 14,000 customers in December quarter

Third straight quarterly decline for the carrier. Vodafone PLC reports big growth in mobile data, but declines in other areas.

Chris Keall
Fri, 10 Feb 2012


Vodafone: 2,420,000*
Telecom:  2,079,000**
2degrees: 875,656***
TelstraClear/MVNOs: 50,000****


Vodafone NZ lost a net 14,000 customers in the three months to December 31, according to figures released by its parent company today.

The carrier's connection numbers have edged down in each of the past three quarters, for a cumulative loss of 64,000.

At an August 2011 trading update, Telecom said it had lost 95,000 customers during its most recent quarter.

2degrees appears to be catching the customers falling from the big two carriers. Yesterday, the relative newcomer claimed 876,000 customers, up on its year-ago figure of 580,000.

Vodafone New Zealand’s quarter three customer numbers, released overnight, reflect continued strong competition in the market.

Fewer on pre-pay, more on contract
Once again, the silver lining for Vodafone was that the percentage of its customer base on pre-pay plans continued to nudge down, to 66.8% (from the previous quarter's 67.2%). Analysts say contract customers spend more than those on pre-pay.

A Vodafone spokeswoman told NBR that "The decline in prepay customer numbers slowed in the December quarter, as a result of Vodafone’s Prepay Smart Plans which launched in mid-way through the period."

New iPhone 4S plans released in December had also been popular.

Contract customer numbers had grown on the back of new Smart Plans that bundled any-network minutes (allowing calls to rival networks), the spokeswoman said.

Forsyth Barr research director Guy Hallwright told NBR yesterday that Vodafone and Telecom (due to report on February 24) were likely to record further declines in mobile customers.

All carriers count each SIM card a "customer." That means the proliferation of SIM card-packing devices, like USB data sticks and iPads, has boosted total numbers. So have people who have more than one handset, or SIM card, for home and work, or to take advantage of different plans on different carriers.

The result is that the number of mobile "customers" - 5,424,656 - exceeds New Zealand's total population of 4,437,845.

Mobile data stars in Vodafone's global result
Vodafone's global financial result was below forecast, with the Eurozone financial crisis blamed.

Total revenue edged up slightly to £11.6 billion (or -2.6% with foreign exchange and one-off items included; the company does not report a net profit figure in its interim quarterly updates).

A 4.7% fall in the company's core voice business was balanced by a 23% increase in revenue from mobile data, a 4.3% increase in messaging revenue and a 3.9% gain in fixed line revenue.

But although mobile data growth was growing (it now accounts for 15% of Vodafone's total revenue, up from 12% a year ago), the rate of growth was slowing. One analyst pointed to the growing phenomenon of "wi-fi offload," which sees smartphone users ditching mobile data at times in favour of cheaper or free wi-fi networks, a potential dampner.

NZ revenue falls
Growth in Vodafone's Africa, Middle East and Asia Pacific (AMAP) division - which includes New Zealand - help offset Euro crisis woes, the company said.

However, AMAP's result was dominated by India, where revenue leapt 20%.

Vodafone NZ revenue fell 0.4% against the year-ago quarter.

A specific revenue figure was not reported, but accompanying commentary said, "In New Zealand service revenue growth was impacted by voice and SMS termination rate cuts and the uptake of more competitively priced tariffs."

Another round of government-mandated cuts to mobile termination rates (or MTR, the fees telcos have to pay each other if a call or txt terminates on a rival network) is due in April.

Across the Tasman, Vodafone Hutchison Australia (VHA) revenue was down 1.4%. VHA is 5% owned by Telecom NZ. Yesterday, Telstra reported strong mobile gains.

* Vodafone PLC 2011 financial report, three months to December 31, 2012

** Telecom 2011 third quarter trading update
*** 2degrees public announcement
**** Estimate based on MVNOs' comments to NBR. Mobile virtual network operators resell a wholesale service. Easily the largest is TelstraClear, with around 47,000 mobile customers (the carrier told NBR on Feb 9, 2012) using a rebadged version of Vodafone's network. Vodafone does not include MVNO numbers in its total.

Chris Keall
Fri, 10 Feb 2012
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Vodafone loses 14,000 customers in December quarter