Vodafone still bleeding mobile customers

Vodafone Australia has not yet been able to stem the tide of mobile user losses despite a dedicated turnaround effort, losing a further 137,000 mobile subscribers in the six months to June 30.

The results follow a loss of more than one million mobile customers in its last financial year, which brought the telco's user base to under 5 million for the first time in four years, not including wholesale customers.

In half year results to June 30 released yesterday, part-owner Hutchison Telecommunications Australia said although Vodafone's operating performance had improved, the telco's growth had been affected by a subdued consumer mobile segment.

“The relatively inert customer base was another hurdle to acquiring new customers."

Most of the customer losses occurred in the prepaid and wholesale customer base due to "seasonal trends and stiff competition from a wide range of alternative providers".

HTA said Vodafone had experienced growth with "high-value" postpaid customers - those who used the telco's 4G service on higher price plans.

The results come despite a promise of positive subscriber growth in mid-2014 by former Vodafone Australia CEO Bill Morrow.

Prior to his departure to NBN Co, Morrow implemented a three-year turnaround strategy - which is nearing completion - aimed at restoring the company's reputation following a period of poor reception and customer service.

But Morrow's successor, Inaki Berroeta, has declined to commit to Morrow's forecast of a 2014 return to subscriber growth, recently admitting that the telco had not yet shaken negative perceptions around its quality of service.

Vodafone continues to lag behind rivals Optus and Telstra, the latter who remains the only of the three to have added mobile users to its customer base over the last year.

Despite the disappointing results, HTA said it was pleased with the progress of Vodafone's turnaround efforts, and expected to see benefits flow through to financial results from the second half onwards.

"In the second half of 2014 and into 2015, VHA will continue to improve the commercial capabilities of the business, with further improvements to service, online retail capabilities and points of sale to match its commercial presence to its expanded network coverage."

"HTAL remains confident VHA is on track to achieving its turnaround goals and HTAL is committed to its investment in VHA and will continue to support its growth and profitability in the future."