Vodafone UK Top 606000 Fixed Broadband Users as 5G Roaming Live

Mobile giant and UK ISP Vodafone has published their latest quarterly results to the end of June (Q1 FY20) and launched 5G roaming in 55 towns and cities across four countries (Germany, Italy, Spain and the UK). On top of that they added +31K fixed broadband customers to total 606,000 (down from +50K added in the previous quarter).

The biggest news in the last quarter was of course the commercial launch of Vodafone’s new ultrafast 5G based mobile broadband network (here and here) and as promised they’ve today given that a boost by switching-on 5G roaming in four countries (as above).

Under the plan this will expand to go live across 55 cities in 9 European markets by the end of the current financial year, although obviously it currently only has very limited coverage. Similarly so few people own 5G Smartphones today that the vast majority of customers will see no real benefit. In keeping with all this they recently signed a new network sharing deal with O2 to help boost 5G (here).

Elsewhere there’s zero mention of their progress in terms of customer take-up on Cityfibre’s new Fibre-to-the-Home (FTTH) broadband network, which aims to cover 5 million UK premises by 2025. However the operator saw their fixed service revenues increase by just 0.3% (Q4: 2.5%) and they added +31,000 new fixed broadband customers (mostly from their Openreach based FTTC / VDSL2 packages).

Nick Read, Group CEO, said:

“Our service revenue growth improved during the first quarter, led by Italy, and mobile churn fell to another record low. Following a significant quarter of commercial activity, we expect the gradual recovery in our service revenues to continue, underpinning our financial outlook for the year.

With the completion of the Liberty Global acquisitions, Vodafone will become Europe’s leading converged operator, with growing fixed and converged services contributing around half of our European service revenues. We have developed a detailed plan to deliver the customer benefits and capture the substantial synergies from the deal, which we will start to execute immediately.

We also have made good progress on improving the utilisation of our assets. We will capture industrial efficiencies through network sharing agreements signed in multiple markets, and today we are announcing the decision to create Europe’s largest tower company. We believe there is a substantial opportunity to unlock the embedded value of our towers, and we have started preparations for a range of monetisation options over the next 18 months, including a potential IPO.”

In other news Vodafone said they were now proceeding with plans to monetise a substantial proportion of its European tower infrastructure during the next 18 months, which will be supported by the creation of Europe’s largest tower company (TowerCo). This legally separated organisation will be operational by May 2020 and comprise some 61,700 towers in 10 markets with potential proportionate EBITDA of around €900 million (75% of these sites are in the major markets of Germany, Italy, Spain and the UK).

Vodafone believes that there is significant scope to generate operational efficiencies and increase tenancy ratios across the portfolio, and that it will be possible to monetise towers while preserving network differentiation and long-term strategic flexibility. In fact they’ve already received several offers for various parts of the tower portfolio.

Total towers comprise 19,300 in Germany, 11,000 in Italy, 9,700 in Spain (adjusted for the sharing deal with Orange), 6,600 in the UK (representing 50% of total UK towers, consistent with Vodafone’s ownership of Cornerstone, the 50:50 joint venture company that owns and manages its passive infrastructure) and 15,100 in Other Europe (excluding VodafoneZiggo).

Otherwise Vodafone’s overall UK service revenue for the quarter hit €1,233m (down from €1,257m in the previous quarter). The full report is here (PDF).