Vodafone NZ gains customers, but revenue declines

Vodafone NZ gained 16,000 customers in its quarter ending December 31, 2013, according to accounts filed overnight by its UK parent.

The carrier ended the quarter with 2.29 million total mobile customer connections*. After minor ups and downs, that's almost the same figure as this time last year (2.31 million).

Telecom reported a net gain of 92,000 mobile customers during its first-half for 1.81 million (the company is due to report its full year result, including its latest mobile numbers, on February 21.

Privately-held 2degrees has never reported in detail on customer numbers, and has not provided a big-picture update since August 2012, when it claimed 1 million customers, 100,000 of them on contract.

Vodafone PLC's spreadsheets don't break out financials for its fully-owned NZ subsidiary. But an accompanying management statement notes that in the AMAP (Africa, Middle East and Asia Pacific) region, "Service revenue increased 1.9%, with growth in Turkey, Qatar, Egypt and Ghana being partly offset by declines in New Zealand and Australia."

Vodafone NZ's percentage of customers on contract was 35.7% in the three months to December 31, versus 35.8% in the prior quarter 33.7% in the year-ago quarter.

At its August 2013 update, Telecom said 49.45% of its customers were on contract.

At its August 2012 update, 2degrees said 10% o its customers were on contract.

Phone companies prefer high-yielding contract customers to prepay. At its August 2013, update or example, Telecom said its ARPU (average revenue per user) was $54 for contract customers versus $12 for prepay customers in the six months to June 30, 2013.

The December quarter saw Telecom launch 4G (on November 11). The move spurred Vodafone, which launched 4G back in February, to drop its $10 surcharge on most plans for accessing the faster mobile service. (2degrees says it will launch 4G later this year). The move followed on the heels of a Telecom move to commercialise its phonebox wi-fi network.

Worldwide, Vodafone saw revenue in the three months ended December 31 fall 3.6% to £10.98 billion, from £11.39 billion a year earlier. Analyst consensus was £10.86 billion.

The company did not provide profit or loss numbers or the half-year, but reiterated its full-year guidance of adjusted operating profit around £5 billion.

Last week, Vodafone's investors voted near-unanimously to approve the $US130 billion sale of its 45% stake in Verizon Wireless, the biggest wireless operator in the US, to joint-venture partner Verizon Communications. Vodafone is giving shareholders a special dividend of $US84 billion in the wake of the sale. The Wall Street Journal describes as the biggest single cash return to shareholders in corporate history.

Vodafone NZ only files full-year results.  Its most recent results filed wiht the Companies Office say it made a profit of $55.9 million in the 12 months ended March 31, from $175 million a year earlier. Revenue rose by $149 million, or 9.2 percent, to about $1.77 billion but was offset by a $136 million gain in cost of sales and $83.5 million increase in operating expenses. Vodafone NZ pinned the profit fall on costs associated with its acquisition of TelstraClear.

Vodafone NZ declined comment on the numbers released overnight.

ckeall@nbr.co.nz

* For Telecom, Vodafone and 2degrees, customer numbers including any customer active in the past three months. The number is a count of total paid connections; if a customer has different SIM cards for, say, a cellphone, data stick and tablet, that counts as three customer connections. Numbers exclusde machine-to-machine connections, such as a burglar alarm with a sim card.