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Vodafone UK Continue TV Trial and Grows to 167,000 Broadband Users

Tuesday, November 15th, 2016 (10:25 am) by Mark Jackson (Score 810)
Vodafone UK 2016

Telecoms giant Vodafone UK has today released their latest quarterly results (calendar Q3 2016), which saw their fixed line broadband customers grow once again to total 167,000 (up by +30K in Q3 vs +28K in Q2) and UK 4G outdoor coverage increase to 92% (or 96% by Ofcom’s definition).

We note that the acceleration of growth in Vodafone’s UK fixed line broadband base appears to be levelling off after a surge since last year’s launch, which saw their customer numbers increase by +14,000 in Q4 2015, then +20,000 in Q1 2016, followed by +28,000 in Q2 2016 and now +30,000 in the quarter to 30th September 2016.

None of this should come as a big surprise because Vodafone still hasn’t put much effort into promoting their home broadband packages, although they were one of the first to adopt a combined price for line rental and broadband during the quarter.

Elsewhere there’s been no solid update on Vodafone’s long-held plans for launching a Pay TV (IPTV) service in the UK, which was originally expected to launch by around the end of 2016 and yet today’s results merely confirm that the field trials are still on-going.

However the results did include this sobering note: “If we fail to deliver converged services in key markets, due to inability to access infrastructure or content at a reasonable price, this could potentially lead to higher customer churn and/or significant downward pressure on our prices.”

Vittorio Colao, CEO of Vodafone Group, said:

“We have further improved our performance during the first half of the financial year with Europe modestly ahead of our expectations – led by Germany and Italy – and good execution in AMAP. Our substantial network investments and ‘more-for-more’ propositions have allowed us to capture opportunities from strong data demand, supporting European mobile contract ARPU and continued growth in emerging markets.

As Europe’s fastest-growing broadband operator, we are driving rapid uptake of our consumer fixed and TV services while our wholly converged Enterprise business continues to outperform its peers. We are now translating faster revenue growth into margin expansion, supported by our focus on cost efficiency.

Overall, we expect to sustain our underlying performance in the second half of the year and remain on track to meet our full-year objectives despite macroeconomic uncertainties. This performance allows for improved returns to our shareholders, as reflected by the growth in the interim dividend.”

Otherwise Vodafone’s main focus is still their core mobile business, which now reflects a total of 8.5 million 4G subscribers (up strongly by +1 million in Q3 vs +0.5 million in Q2 2016) and they’re home to an overall total of 18,010,000 mobile customers.

On the financial front Vodafone delivered weaker quarterly UK revenue of £1,643m (down from £1,758m in Q2 and £1,903m in Q1). A big part of that stems from a sharp fall in fixed line service revenue (Q3 revenue was £362m, down from £405m in Q2 2016). Mobile contract revenue also suffered a big slip. See the full results here.

Side Note: 97,000 of the 167,000 strong fixed broadband base are consumer customers, with the rest reflecting their existing base of business customers and external unbundled (LLU) broadband lines for third-party ISPs (these existed before their new home broadband service launched in 2015).

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3 Responses
  1. Hi, it’s not the growth that is levelling off but the acceleration of that growth!

  2. MrWhite

    Vodafone are losing the impetus for quad play given the announcement was back in spring 2015 and TV is still in trial.

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