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Vodafone UK Home Broadband ISP Grows to 316000 Subscribers

Thursday, February 1st, 2018 (9:22 am) - Score 2,049

The latest Q4 2017 (calendar) results from Vodafone UK reveal that their fixed line broadband base grew by +39,000 in the quarter to total 316,000 (up from the +33K added in Q3), which in recent months has been boosted by some very aggressive FTTC price cutting.

Meanwhile Vodafone’s mobile customer base shrank by -25,000 in the quarter to total 17,609,000. Interestingly the operator’s report doesn’t offer much detail on their 4G uptake and deployment progress, which is perhaps because they’re going through a bit of a rough patch.

On the financial side, Vodafone reported quarterly UK service revenues of £1,496m (down from £1,510m in Q3). Otherwise there’s not a lot else to highlight and you can read the full results here. The main UK development for the operator is still their deal with Cityfibre to potentially rollout a 1Gbps capable Fibre-to-the-Home (FTTH/P) broadband network for up to 5 million UK premises by 2025 (here), which will start in Milton Keynes (here).

UK Results Overview

Service revenue declined 4.8%* (Q2: -3.0%*). The slowdown in quarterly trends reflects the impact from handset financing, which weighed on organic service revenue by 3.6 percentage points (Q2: -1.5 percentage points). Excluding the impact of handset financing and the drag from regulation, service revenue trends were stable at 0.4%* (Q2: 0.6%*), with improvements in consumer mobile and fixed line being offset by a slowdown in Enterprise fixed partly relating to project phasing.

Mobile service revenue declined 5.2%* (Q2: -3.7%*), but grew 1.6%* (Q2: 1.0%*) excluding the impact of handset financing and regulation. This underlying growth was supported by more-for-more actions, a better inflow mix of higher-value customers, and RPI-linked consumer price increases. Enterprise continued to decline in a competitive market, however ARPU trends improved with an increasing proportion of customers adopting our bespoke SoHo tariffs. Total contract customers grew 6,000 (Q2: -3,000); excluding Talkmobile, our low-end mobile brand which is being phased out, net additions grew by 41,000 (Q2: 26,000). Our good commercial momentum was supported by further improvements in consumer net promoter scores and record network performance.

Fixed service revenue declined 3.6%* (Q2: -0.6%*), reflecting customer losses in prior quarters and project phasing during the quarter in Enterprise. These more than offset our strong momentum in consumer broadband, where we enjoyed our best ever quarter of consumer broadband net additions (Q3: 39,000 households). In total we now serve 316,000 customers.

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By Mark Jackson
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he also founded ISPreview in 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on Twitter, , Facebook and Linkedin.
Leave a Comment
9 Responses
  1. Huw Watkins says:

    Hopefully they will upgrade their back-haul links to cope with the increased demand! I’m with a Vodafone re seller (Origin) and evening speeds and latency is terrible.

    1. Kamil says:

      I don’t have any problems. I have Vodafone broadband for nearly 12 months in Cambs (St Neots). If I compare it to TalkTalk I have had before is like chasm.

    1. Steve Jones says:

      Yup, and it seems clear that Vodafone are intent on loss-leading in order to gain market share. It’s impossible to imagine how Vodafone can be making money on their current fixed line market. They would also probably fall out of any consideration of predatory pricing as I assume the regulators will deem that where Vodafone do have SMP, it’s in a different market area.

      That said, TalkTalk appear to have been borrowing money in order to pay dividends which is the sort of thing more normally associated with some of the more ruthless private equity investors leaving he shell of a company and saddling creditors, like banks, with a loss. That’s roughly what happened with BHS, and there are elements of it with Carillion as well. Paying out dividends out of operating profits is one thing, but this is another and if TalkTalk have been borrowing to fund dividends it will end in tears. Also, it would make a really neat acquisition target for Vodafone.

    2. Steve Jones says:

      @Mark

      So you did – I admit I never got round to reading that article. If Vodafone are able to continue this way, then TalkTalk is going to fall prey and it would be a cheap way for Vodafone to acquire 4m retail customers and they have deep pockets. Sky has their other offering to bundle in.

      I wonder what the bets might be that Vodafone will put in a bid for TalkTalk if the share price falls much more.

  2. Chad says:

    It really is a shame to see the race to the bottom – with so much investment required for backhaul to meet increasing demand. There should be a price associated to the value these services give. The residential services almost appear to be loss leaders, with the business services supporting margin. Consolidation and price rises could be on the cards

  3. Jamie Simms says:

    You only have to read the Vodafone E forum to see the amount of customers that are struggling with speeds in the evening and weekends as Vodafone backhaul network and also the core network can’t cope.

    This is also having a knock on effect with the mobile network too now as some upgrades have been put on hold as the core network cammy cope with all this traffic.

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