Mixed quarter for 2degrees

2degrees had a mixed December quarter, according to accounts filed by its majority shareholder – the Seattle-based, Toronto-listed Trilogy International Group.

The number of postpaid or contract customers on 2degrees' mobile network rose to 396,000 from the year-ago quarter's 372,000.

However, pre-paid accounts (still the bulk of the company's business) fell, and total mobile connections dropped to 1.421 million from the year-ago 1.439 million.

And even though post-paid grew in total connections, average revenue per user (arpu) dropped from $US35.22 per month from the year-ago $US37.44.

Across 2degrees' total mobile customer base, arpu dropped to $US15.74 from $US16.18.

The telco continues to trail Spark and Vodafone in the mobile market by a wide margin, both in terms of total customers (both Spark and Vodafone claim around 2.5 million total mobile connections) and the percentage on higher-yielding postpaid plans (Spark and Vodafone both have more than half their customer base on contract).

Landline progress
Landline broadband customers grew 23%, albeit off a tiny base, to 69,000 from the year-ago quarter's 56,000. But price competition meant landline broadband revenue increased by only 12%.

Adjusted operating earnings were $US20.3m for the quarter vs the year-ago $US24.6m.

Total revenue was static at $US142.6m vs the year-ago quarter's $US142.4m.

As reported earlier today, a conference call to analysts saw Trilogy apparently cool on the asking price (reportedly $A500m+) being demanded by ASX-listed Vocus for its New Zealand assets, which include 200,000 Orcon and Slingshot fixed-line broadband customers.

Trilogy noted, 'there's a pretty big gap between what we think this thing would be worth and what the seller's expectations are" because of the high level of competition in the New Zealand marketplace.

Despite its major asset, 2degrees, eking into the black, Trilogy's Toronto-listed shares have struggled since its reverse listing 18 months ago.

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