Vodafone Hutchison Australia has added 190,000 new customers to take its subscriber base to 5.7 million and flagged a $2 billion spending spree to bolster its market position.
Australia’s third-ranked telco has reported earnings before interest, tax, depreciation (EBITDA) of $477 million in the six months to June 30, up 15.9 per cent from a year ago, while its net loss for the period was $81.5 million – down from $164 million.
The 3.5 per cent lift in subscriber numbers is the fifth half-year of customer growth for Vodafone, which lags market leader Telstra, which has 17.4 million mobile subscribers and second-ranked Optus, with 9.7 million.
VHA chief financial officer James Marsh put the trimming of VHA’s net loss by 50.3 per cent year-on-year, to stronger spending discipline and increasing returns on long-term structural investments.
“The loss reflects the massive investments we make into upgrading sites, spectrum, increasing data growth – by 60 per cent over 12 months – and we get increasing returns on those,” Mr Marsh said.
VHA’s growth in customer numbers comes on the back of increased take-up through online retailer Kogan Mobile, via Vodafone’s 4G network, Mr Marsh said, and post-paid users, while pre-paid customer numbers slipped slightly.
Customers connected to Vodafone’s network through resellers such as Kogan increased by 29 per cent, year-on-year, to 654,000.
Kogan will start selling fixed-line NBN home internet next year, in a partnership set to continue until 2022.
VHA’s gross average revenue per user (ARPU) was up by two per cent hitting $45.89 for the six months to June 2017 after adjusting for losses from regulated cuts to mobile termination rates across the industry.
However, unadjusted ARPU was down 5.7 per cent year-on-year to $46.32.
Mr Marsh said Vodafone remains pleased with the ARPU numbers, which were supported by migration to higher plans, and he attributed the shifting revenue per user to several trends in mobile usage.
“Our net ARPU is growing, customers are stepping up to higher plans and really, the demand for data just continues, while we’re also seeing a steady shift to SIM-only plans, either users migrating up out of bundled plans or legacy plans and again with the popularity of our $5 roaming SIM plan,” he said.
Mr Marsh also identified a growing SIM-only, hand-me-down mobile market.
“People don’t want to be tied to a device or a plan for a full 24 months or 36 months, so we’re seeing much more desire for choice and flexibility.”
Mr Marsh said VHA has a busy outlook for the second half of 2017, including a major postpaid refresh and its planned fixed broadband launch.
VHA said it plans to spend around $2 billion on its mobile network and technology investment in 2017, including spectrum license payments and 1,800 new and upgraded mobile sites.