Home > Content > VodaFlee: Telco Lose 178,000 Users, -$131M Loss

VodaFlee: Telco Lose 178,000 Users, -$131M Loss

VodaFlee: Telco Lose 178,000 Users, -$131M Loss

$131.3m loss just announced by owners Vodafone Hutchinson Australia (VHA) comes as the telco lost a massive 178,000 customers during the first six months of 2012.

However, this was slightly better than the 200,000 users that fled the network in July-Dec 2011.

This brings Vodafone’s total base down to 6.8 million from 7.2 m in June 2011 – meaning Australia’s telco No. 3 has lost close to half a million customers in 12 months.

Voda’s postpaid customer base declined “slightly” and now comprises almost two-thirds of its total, a disappointing result considering it grew postpaid by 16,000 in H2 last year.

Voda attributed its improvements in customer “churn” to better customer service on social media and call centres.

“Churn” denotes the diffference between the number of users who signed up and left the network.

However, Vodafone’s loss of $131.3m is even worse than 2011 figures – when the telco reported a $78.2m loss for same H1 period last year (-$167.7m loss for full year 2011).

Voda’s fortunes took a severe southwards dive in the aftermath of the ‘Vodafail’ crisis, which first arose in late 2010 when it was subject to major user backlash after colossal network failure, with a lack of 3G coverage resulting in dropped phone calls.

The telco took months to even admit there was a problem, but now says the number of complaints by customers about its network’s service to the Telecommunication Ombudsman has fallen during 2012.

Despite the deep woes, VHA said its $1bn investment in upgrading the network is starting to deliver “positive momentum” and the renewed focus on customer service has contributed to improvements in customer retention.

The telco said it is making “good progress” in improving network coverage and speed and is now approaching completion of its network roll out, comprising of a new 3G 850MHz network, a national network equipment replacement program and is well underway with installation of new IP-enabled transmission equipment.

“These results speak very clearly to a need to refocus on the quality and consistency of the experience we deliver to our customers,” said VHA’s new CEO Bill Morrow.

This is Morrow’s first set of financial results as Chief of the troubled telco, who undertook a major organisational restructure in the wake of the operational crisis, when he joined the company earlier this year.

“Our customers can expect to experience improvements in the network and customer service throughout the remainder of 2012, and we will make further announcements on our 4G (LTE) plans for next year,” he said.

VHA is a 50:50 joint venture between Hutchison Telecoms and Vodafone Group.

Canning Fok, Chairman of Hutchinson Telecommunications Australia Limited (HTAL), said “Bill Morrow and VHA have our full support, and despite the operating challenges currently facing the business, we believe the strategy being implemented will return VHA to growth in the future. “

“However, we expect the next 12 months to remain challenging,” he warned.

With the continuing investment in the Vodafone network in the six months to 30 June 2012, HTA’s share of VHA’s capital expenditure increased 22.4% year-on-year to $198.4 million.

However, Hutchison Telecommunications Australia’s share of VHA’s total revenue decreased by 9% year-on-year to $1.035 billion.

Read Ouch: Vodafone $167M Loss As Vodafail Bites