Tuesday, 01 August 2017 18:16

Vodafone incurs losses, but invests $2 billion to boost mobile network Featured

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Vodafone incurs losses, but invests $2 billion to boost mobile network Image courtesy of Sujin Jetkasettakorn at FreeDigitalPhotos.net

Vodafone Australia is touting a spend of $2 billion on development and expansion of its Australian mobile network over the full year 2017 despite a year-on-year loss of $81.5 million for the first half.

Australia’s third placed mobile provider after Telstra and Optus says it is outlaying the $2 billion to boost its network in both metropolitan and regional areas of the country, “increasing coverage, capacity, performance and competition for Australian mobile customers”.

The telco — a joint venture between Hutchison Telecommunications and Vodafone (VHA) — reported its total customer base grew by nearly 190,000 to 5.7 million in the six months to the end of June, with total revenue climbing 3% year-on-year to $1.6 billion, with EBITDA up 15.9% to $477.3 million.

And despite recording the $81.5 million loss for the first half, the loss was a decrease of 50.3% from the same period the previous year, when it reported a loss of about $163 million.

Vodafone's chief financial officer James Marsh told a media briefing on Tuesday that the company was looking to grow revenue and returns over the remainder of this year, and beyond, by driving “long-term customer satisfaction”.

“We are pleased with the overall performance and the positive step up in post-paid, pre-paid and other segments.”

Marsh said the investment includes spending on building new mobile sites or upgrading 450 sites in both regional and metro areas.

“Already, the VHA network reaches more than 22 million Australians, and is recognised as the top-performing network in cities with populations above 100,000. And we’re only going to build on that into the future.

“In 2017, we are putting close to $2 billion into mobile technology, including almost 1800 new and upgraded sites, spectrum licence payments, and our continued fibre transmission rollout.

“Our customers know how good our network is, and this positive customer sentiment is reflected through our Net Promoter Score. We are committed to giving customers an even better experience in more places, and offering them even more great value.”

Marsh said Vodafone welcomed the entry of TPG into the Australian mobile market.

“We welcome TPG’s launch of its mobile business. We believe in strong collaboration between carriers and that it is inefficient for one party to build a mobile business. We are bullish about our performance with three or four players in the market. Independent verification shows we have the best network in metro areas and we are open to any competition.”

According to Marsh, Vodafone had produced “pleasing results”, despite what he said were “regulatory barriers to effective competition in many areas of the Australian market”.

“Driving our performance is our fantastic network, complemented by great value products. New and existing customers are drawn to our generous data inclusions and unrivalled $5 Roaming and free New Zealand roaming.”

Marsh says Vodafone has seen data growth of 60% every year and needs to keep up investment in its network because of this.

“You have constantly seen high spending by Vodafone, with the losses reflecting our huge investment in the network. We have the most amazing network and will continue to invest accordingly.”

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Peter Dinham

Peter Dinham is a co-founder of iTWire and a 35-year veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).

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