Vodafone loses 50,000 customers

TOTAL NZ MOBILE CONNECTIONS

Vodafone: 2,434,000*
Telecom:  2,079,000**
2degrees: 580,112***
MVNOs: 45,000****

More bad news for Vodafone NZ, which yesterday lost its long-time iPhone monopoly: its UK parent's latest market filing reveals its local operation has lost customers for the second quarter in a row.

For the three months to September 30, Vodafone NZ had a net loss of 24,000 customers. In the previous quarter it shed 26,000.

Despite the losses, the carrier still has more than 2.4 million subscribers, and a handy lead over Telecom (see table above). 

The half-year total loss of 50,000 cancels out Vodafone's prior six months that saw it gain 40,000 - meaning it's more less even-stevens for the past year, and still only marginally down on its 2.5 million customer count at the time of 2degrees' August 2009 launch.

The percentage of Vodafone customers on prepay - over 70% at the time of 2degrees' launch - continued to slip, falling from 67.6% to 67.2%. 

Vodafone's spin is that pre-pay or "glovebox" customers - as country manager Russell Stanners has called them - yield much lower average revenue per month than contract customers. The subtext is that 2degrees is welcome to them. (2degrees has expanded into contracts, recently adding business plans).

Today, spokesman Matt East picked up on this theme, noting Vodafone had enjoyed a slight gain in contract or "post pay" customers over the quarter.

Mr East said the decline in pre-pay customers had slowed. The company had new plans in the works, Mr East said (NBR understands a Best Mates bombshell will shortly be lobbed in Telecom and 2degrees' direction). It also expected a seasonal upswing going into Christmas.

"What we are seeing in New Zealand is evidence of a truly competitive market," Vodafone general manager for corporate affairs Tom Chignell told NBR earlier.

"Some quarters we come out on top and others we don't. I guess that's something that should be celebrated, isn't it?" 

Telecom down too
At its full-year result, Telecom said it had 2.079 million mobile subscribers - a net loss of 95,000 over its June quarter.

Beyond its total number of mobile customers, a key problem for the company is the so-so pace of migration to its XT network.

At its full-year result (presented in August), the company said just over half of its mobile customers had moved to XT in the two years since its launch.

Its old CDMA network is due to be switched off in June next year. Telecom will be hoping its newly gained iPhone 4S will help speed up the migration to XT (as well as attract customers from competitors).

2degrees up
Vodafone and Telecom's losses come at a time when 2degrees is apparently adding customers at pace.

On March 22, the relative newcomer said it 580,000 active customers - a big leap over the 206,000 it reported in February 2010.

The privately-owned 2degrees has been mum since March. But if its competitors' subscriber numbers are anything to go by, it's continuing to gain share.

* Vodafone PLC 2011 financial report, three months to September 30, 2011
** 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 40,000 mobile customers using a rebadged version of Vodafone's network. Vodafone does not include MVNO numbers in its total.

The total number of mobile connections (around 5.27 million) exceeds New Zealand's population, reflecting that a number of people have more than one mobile phone account and/or data devices with SIM cards.