Home / Networking / Vodafone Australia EBITDA tops AU$1b but continues to post net loss

Vodafone Australia EBITDA tops AU$1b but continues to post net loss


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The Vodafone TV


(Image: Vodafone)

Revenue is up, earnings are up, and net profit is a third better than last time, but the tale of the tape for Vodafone Australia is that it is still left with a net loss at the bottom of its financial reports.

In what CEO Iñaki Berroeta labelled as a good year for the company, Vodafone Australia saw its revenue increase 5.5 percent year-on-year to AU$3.65 billion for the year to December 31, and its earnings before interest, tax, depreciation, and amortisation (EBITDA) jump by 13.4 percent to AU$1.1 billion.

For its bottom line, net loss was reduced by 30 percent to AU$124.4 million compared to last year’s AU$177 million.

Across the year, Vodafone saw its total customer base surpass six million thanks to the addition of 211,000 customers. Broken down, the telco increased its postpaid customers by 2 percent to record 3.45 million, prepaid customers grew six percent to 2.2 million, and the customers on Kogan Mobile and Lebara resellers jumped 5.3 percent to 356,000.

During the year, the company launched its entry into fixed-line broadband that would see Vodafone release retail NBN plans. On Wednesday, Berroeta said the company was adding around 6,000 customers each month, as the company reported having 33,000 NBN customers.

Monthly average revenue per user (ARPU) was down 2 percent to AU$37.45 for customers restricted to Vodafone’s own offerings, while adding in customers on Kogan and Lebara saw ARPU fall by 4.4 percent to AU$35.52.

Commenting on the results, Berroeta pointed to mobile market competition and increasing data inclusions across the industry.

“The price of data per GB has been on a steep decline for several years, decreasing around 85 percent over the past two and a half years,” he said.

“For example, the price per GB on a competitive [mobile network operator] AU$40/AU$45 SIM Only plan was just under AU$7 in 2016, today it’s around AU$1.”

Berroeta also added the company had spent AU$1.3 billion during the year to handle the increases in data being used, and to get its network ready for 5G. The spend included constructing 180 new mobile sites and upgrading 850 existing sites.

“This included the construction of 22 new sites as part of the Australian government’s mobile blackspots program,” Vodafone half-owner Hutchison Telecoms said in its results.

“[Vodafone Australia’s] significant network investment in metropolitan and regional areas helped support growing customer data usage, which increased 45 percent from 2017 to more than 360 million gigabytes in 2018. ”

Following the decision by the Australian government to lock Huawei and ZTE out of any 5G network build in the country, Vodafone will need to find a replacement for the Huawei kit it uses.

“We are currently evaluating the different options around the 5G roadmap,” Berroeta said. “It is not a secret that we were basically an Ericsson core with a Huawei radio access network.”

“It is still a long time to be using 4G, but eventually, every … service that we provide on 5G will be on different equipment than Huawei.”

The first casualty of the Huawei ban has been TPG, who disclosed earlier this week that it would abandon its mobile network build in Australia, incurring an accounting hit of almost AU$230 million.

However, should the proposed merger between TPG and Vodafone go ahead, the new and bigger TPG would have Vodafone’s current network coupled with TPG’s existing spectrum holdings, and the AU$263 million of 5G spectrum purchased in December.

Berroeta said the merger now makes more sense than before, and the combined assets would make a very strong third player in the market.

“With the next generation of mobile network just around the corner, there’s never been a more important time to ensure Australia has effective 5G mobile competition,” he said.

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