Vodafone See UK Fixed Broadband ISP Base Top 435000 Customers

Telecoms giant Vodafone has today published their latest quarterly results to the end of June 2018 (Q1 FY19), which saw them add +52,000 new broadband and phone customers (down from +65,000 in the previous quarter) to total 435,000. Meanwhile their mobile base shrank to 17,432,000 (quarterly fall of -83,000).

Most of the main developments for Vodafone UK in the past quarter have tended to centre on their partnership with Cityfibre. The latter is splurging £500m on the construction of a new 1Gbps capable Fibre-to-the-Home (FTTH) broadband network (here), which aims to cover a “minimum” of 1 million homes in up to 12 of Cityfibre’s existing cities or towns by the end of 2021.

Under the agreement Vodafone will act as the primary retail ISP for the new network. So far Aberdeen, Peterborough, Edinburgh, Coventry, Huddersfield, Milton Keynes and Stirling have all been confirmed as being among the first UK cities to benefit (accounting for about 500,000 premises and £315m of the total planned investment).

Work is now getting underway in several of these cities (e.g. Aberdeen, Milton Keynes and Peterborough) and the first trial with 50 households has also started (here). Outside of that there hasn’t been a lot to report, but we should point out that the fall in Vodafone’s mobile base reflects prepaid customers, while they actually added +60,000 (net) new contract customers.

Vittorio Colao, Outgoing Group CEO, said:

“The Group’s organic service revenue growth slowed during the first quarter, in line with expectations. The majority of our operations performed well, with ongoing momentum in Germany, further underlying recovery in the UK and continued good growth in AMAP, all of which helped to offset increased competition in Italy and Spain.

Our commercial performance was solid, with further broadband market share gains in Europe, a record number of customers adopting our converged propositions, and the continued success of our world-leading IoT platform.

In India, where competition remains intense, we have now received conditional approval from the Department of Telecoms for the merger of Vodafone India and Idea Cellular, which we aim to close before the end of August, allowing us to unlock substantial synergies.

The Group’s overall performance (including good progress in reducing absolute operating costs for the third year running) provides us with the confidence to reiterate our outlook for the year”.

On the financial front they reported quarterly UK service revenues of €1,256m, although we aren’t going to do a comparison with previous quarters because like other operators Vodafone has just adopted the new IFRS 15 financial reporting standard (this makes it difficult to accurately compare). The full report is here (PDF).

Going forwards we’re still waiting for Cityfibre and Vodafone to name drop the final batch of UK cities in their Phase 1 FTTH rollout, while the related commercial product launch is expected to follow by around early 2019.