Vodafone UK Sees Fixed Broadband Surge to 1.11 Million Customers

Vodafone UK has this morning published their latest Q2 FY23 results, which reveals that their fixed broadband ISP base grew again to total 1.111 million customers (up sharply by 39k in the quarter vs 22k in Q1 FY23) and their mobile base also surged again to total 17.543 million (up by 321k vs 115k in the previous quarter).

The main development from Vodafone, over the past quarter, has been the confirmation of their merger talks with rival operator Three UK (here), which may or may not result in an agreement by the end of this year (under this deal Vodafone would own 51% and CK Hutchison owning 49% of the
combined business). In addition, they’ve also become the first UK ISP to introduce a new WiFi 6E capable broadband router (here) and they launched their own broadband social tariff for those on benefits (here).

In terms of the operator’s fixed broadband base, 54% of those are now “converged” subscribers (i.e. they take both mobile and fixed broadband from the operator). Customers on this service tend to reflect a mix of hybrid fibre (FTTC) and full fibre (FTTP) connections on both Openreach and CityFibre’s UK networks. Sadly, we don’t get any more detail than that.

As for their mobile base, the operator reported a quarterly addition of 58,000 Pay Monthly customers (up from 18,000 last quarter) and another rise of 263,000 in Prepaid / Pay As You Go customers (up from 97,000). In addition, quarterly mobile broadband (data) usage across their UK network reached 390,201 TeraBytes, which is up from 355,661 TB last quarter.

Nick Read, Group CEO, said:

“In the context of a challenging macroeconomic environment, we are delivering a resilient performance this year, alongside making good progress with our operational and portfolio priorities.

We are pleased the Vantage Towers transaction accomplished our three key objectives – monetisation, deconsolidation and retaining co-control of these strategically important assets – and we continue to deliver portfolio actions to strengthen our businesses and accelerate growth. In addition, our recently announced fibre-to-the-home JV in Germany will further enhance our leading gigabit fixed network position in Europe’s largest market.

We are taking a number of steps to mitigate the economic backdrop of high energy costs and rising inflation. These include taking pricing action across Europe, whilst at the same time supporting our most vulnerable customers and driving energy efficiency measures across the business. We are also announcing today a new cost savings target of €1+ billion focused on streamlining and further simplifying the Group.

We are confident that the ongoing delivery of our organic strategy and portfolio actions will underpin long-term growth and create value for shareholders.”

Overall, the operator saw their quarterly UK service revenue decrease to €1,352m (down from €1,360m in the previous quarter), mostly due to a decline in business service revenue due to lower project activity. The full report is here (PDF).