Vodafone UK Top 525,000 Broadband Users and See Mobile Growth

Telecoms operator and ISP Vodafone UK has released their latest quarterly results to the end of 2018 (Q3 FY19), which saw them add another 46,000 fixed line broadband ISP customers to total 525,000 (up from +44K added in the previous quarter). Meanwhile their mobile base grew to 17,175,000 (quarterly rise of 120,000).

Overall it’s been a positive quarter for Vodafone, one where they also found the time to showcase a new approach to expanding 4G and 5G mobile coverage by installing small antennas “below street level” (here). On top of that they’re still set to benefit from Cityfibre’s investment to build a new 1Gbps capable Fibre-to-the-Home (FTTH) broadband network to cover 5 million premises across 37 UK cities and towns by the end of 2024 (here).

Cityfibre’s network is in its infancy and for the time being this means that most of Vodafone’s broadband growth will be coming from their existing FTTC (VDSL2) based packages, where they’re trying to attract customers by adopting aggressively competitive pricing (e.g. 35Mbps from £20 per month and 63Mbps from £24). However they’ve faced pressure from rivals offering similar deals, but recent discounts have kept the growth going.

Meanwhile it’s good to see Vodafone’s mobile base return to growth after several consecutive quarterly declines. Lest we forget to mention that they’ve also just agreed terms to extend their existing mobile network sharing agreement with O2, which should cover both future 5G services and possibly the fibre optic cables that link to their masts / base stations (here).

On the subject of mobile, Vodafone also reported that 59% of their consumer fixed broadband base take a Vodafone mobile product.

Nick Read, Vodafone Group CEO, said:

“We have executed at pace this quarter and have improved the consistency of our commercial performance. Lower mobile contract churn across our markets and improved customer trends in Italy and Spain are encouraging, however these have not yet translated into our financial results, with a similar revenue trend in Europe to Q2. We enjoyed good growth across our emerging markets with the exception of South Africa, which was impacted by our pricing transformation initiatives and a challenging macroeconomic environment. Overall, this performance underpins our confidence in our full year guidance.

We are moving to implement a radically simpler operating model and to accelerate our digital transformation, as demonstrated by the organisational changes we have announced in Spain and the UK. We are also assessing opportunities across our markets to improve asset utilisation through partnering.

This week we announced the intention to extend our existing network sharing agreement with Telefonica O2 in the UK to include 5G services. This will enable us to deploy 5G services to more customers over a wider geographic area, and to do so at a lower cost. After these arrangements have been finalised, we also intend to explore opportunities to monetise our UK tower assets.”

On the financial front fixed service revenue grew 7.3%, driven by continued strong momentum in consumer broadband and by ongoing growth in business. Overall UK service revenue for the quarter hit €1,426 and that’s largely flat from the previous quarter (€1,438m). The full report is here (PDF).

UPDATE 6pm

Vodafone says it’s also “pausing” deployment of Huawei equipment in core networks until Governments can clear up any security concerns, which follows by BT and EE’s recent example.