Vodafone’s launch of 4G in the UK looks likely for September, as its group CEO said he was unconcerned it has lost some customers to EE.
Vittorio Colao also identified the UK as a ‘challenging’ market for the operator, which has historically been battered by economic woes in southern Europe.
Service revenues in its UK business were £1.52bn for the three months to 30 June and Vodafone blamed the 4.5% decline on the competitive landscape and changes to mobile termination rates. On an underlying basis, sales would have declined 2.5%, an improvement on the 3.5% like-for-like decline it saw during the previous quarter.
During the quarter, Vodafone had 12,000 net losses in the UK, thanks to a fall in prepay of 103,000 customers. However, it gained 91,000 new contract customers and said a quarter of its consumer contract services revenues were now being generated by its Red plan, which offers unlimited calls and texts. While Vodafone is taking a hit of around £4 on average revenue per user, the operator is hopeful in the longer term that ARPU will stabilise and the cost of retention will be much lower.
Colao said some Vodafone customers had moved to EE, which has been offering 4G since October of last year, but said he was unconcerned. He said: ‘I’m sure there are some customers who want to try 4G and they will go to EE. but there are a lot of customers who know at the end of the day that Vodafone 3G is pretty good and they could wait six months and get it [with us].’
Vodafone’s Group CEO was asked by reporters when he expected its own 4G proposition to be set up in the UK. While Colao was coy, he noted the end of summer would fall on 21 September. He said: ‘We are just preparing a very very good quality of experience. We think 4G has to be positioned as a very fast and very high quality experience. We have 800Mhz, which is the one that propagates better and gets better through the walls. We are just getting ready.’
Vodafone added that smartphone ownership hit an all-time high of 57% of its base. ARPU was down from £18.50 to £18.20. Churn improved from 34.7% to 27.9%.Across Vodafone Group, underlying revenues were down 3.5%, with southern Europe continuing to struggle. It said it expected to complete its acquisition of Kabel Deutschland in the fourth quarter of this year. Vodafone Group only reports its profits during its half year and full year results.
Author: Graeme Neill