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UPDATE Vodafone UK Stalls TV Launch as Fixed Broadband Growth Slows

Thursday, February 2nd, 2017 (7:43 am) - Score 3,488

The latest Q4 2016 (calendar) results from Vodafone UK reveal that their fixed line broadband base has grown by +16,000 in the quarter (sharply down from +30K in Q3) to total 183,000 customers and outdoor 4G coverage now stands at 97% (Ofcom’s definition). But still no sign of their Pay TV service.

The acceleration rate of Vodafone’s fixed line broadband growth appears to be slowing after a surge following its 2015 launch, which saw their customer numbers increase by +14,000 in Q4 2015, then +20,000 in Q1 2016, +28,000 in Q2, +30,000 in Q3 and now +16,000 in the final three months of 2016.

On the other hand we note that 129,000 of the 183,000 total are consumer broadband customers, which when split out reflects a stronger quarterly increase of +32,000 and this suggests that Vodafone has been bleeding external LLU (unbundled lines sold by third-party ISPs) or business related connections. Sadly the results don’t offer a clear explanation.

Vittorio Colao, CEO of Vodafone Group, said:

“Our overall performance in Europe and Africa remained strong during the third quarter, reflecting good execution. In Europe, service revenue growth continued, led by Italy, Germany and Spain. Mobile contract ARPU continued to stabilise, reflecting the successful adoption of our ‘moreformore’ propositions, while we remain Europe’s fastest growing broadband company, illustrating our effective convergence strategy.

In the UK we have made good progress in improving customer service but face heightened price competition in Enterprise.”

However Vodafone’s main focus is still their core mobile network business, which now reflects a total of 9.1 million 4G subscribers in the United Kingdom (up by around +600,000 in Q4 2016 vs +1 million in Q3 and +0.5 million in Q2). This is perhaps less of a slowdown and more a continuation of Vodafone’s yo-yo like momentum.

The other bad news is that Vodafone has missed another opportunity to provide a constructive update on their long-held plans to launch a Pay TV service in the UK, which would turn them into a quad-play provider. We originally expected this to surface by the end of 2016, but that didn’t happen and today’s results fail to even mention the service (we assume the field-trials are still on-going).

On the financial front Vodafone delivered quarterly UK service revenue of £1,607m (down from £1,643m in Q3 and £1,758m in Q2). See the full results here. We might get a little more information later this morning after the conference webcast.

UPDATE 3:15pm:

Vodafone’s CEO has confirmed that their Pay TV plans for the UK have been shelved so they can focus on more important things, but they might review that decision at a later date if their plans change. Readers may recall that it’s not the first time that Vodafone has tried and failed to launch a TV service over this side of the channel.

Leave a Comment
4 Responses
  1. Avatar Richard says:

    I doubt they can launch a TV service until they sort out the problems with the Vodafone supplied router.
    Many users are finding that the Vodafone router crashes when several WiFi devices are in use.
    Vodafone will not let uses use any other device, Vodafone will no longer give customers there ppppoe login credentials 🙁

    1. Avatar MrWhite says:

      I doubt it has anything to do with the router issues. Unless it’s a separate problem, the router issues are to do with additional access points/roaming

      The issue with the TV service is more likely content rights for the channels and/or whatever hardware they would be using.

  2. Avatar Paul says:

    VOD have great products but their customer service is sucky as hell.

  3. Avatar Dan says:

    A TalkTalk acquisition is blindingly obvious

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