Vodafone has announced a net loss of $167.7m as aftermath of network woes continue to bite.
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This dismal loss figure for full year 2011, which was undoubtedly Vodafone’s annus horribilis, where its network was riddled with problems and subject to mass backlash from millions of customers, who suffered call dropouts, slow data speeds, and lack of 3G coverage, branded ‘Vodafail.’
The $160m loss for the No. 3 telco in Australia compared to a $73.4m profit for previous year, Hutchison Telecommunications (HTA), 50% owners of joint venture Vodafone Hutchinson Australia, said today.
HTA also said its share of VHA’s service revenue was $2,044.2m, down 7.1%, operating margin was $1,510.2 million, down 10.7% and earnings fell a whopping 34.3% to $312.7m.
And it seems customers are fleeing the network en masse, with Voda’s user base dwindling to 7 million (from 7.2 m in June) meaning it lost 200,000 users in the last six months to December.
However the declines eased in the second half of the year, VHA said, and it’s postpaid customer base grew by 16,000, meaning a slight recovery was experienced as 2011 came to a close.
A whopping 375,000 customers left the network in Jan-June period, it said in August, when it announced a $78.2m loss.
Nonetheless, this user loss is woeful compared to rivals Telstra who grew their total mobile user base by one million and now have 13.2m customers, while Optus also grew its base by almost 200,000 to 9.42m, with both telco’s gains thought to be at the expense of Voda.
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However, VHA admitted “operating challenges” in its media conference this afternoon and said over $1 billion has been invested in network upgrades across the country bulding new 3G sites and new 4G capabilities.
“The operational turnaround of (VHA) is underway and network investment is on track,” the company insists.
And Voda are expanding coverage underway and network performance metrics have also improved, VHA execs said at a press call this afternoon.
“With a focus on continuing to invest in network and service, and maintaining a tight control on cost, we expect further operational improvements. We are confident that we have the right strategy to return to profitable growth,” said Nigel Dews, CEO of VHA.
“Our new 850MHz network, built for data, is over two-thirds complete and is now delivering customers a better smartphone experience and we have introduced a network guarantee for new customers,” said Dews.
“Our upgrade and equipment replacement program is also running at full pace and we have begun to integrate new sites into the network.”
More than 1,000 sites are live on the new 3G 850MHz network and 1,500 3G 850MHz sites are expected to be live across Vodafone network by Q3, it said.
Equipment has been replaced with new single Radio Access Network (RAN) equipment across more than 4,000 sites.
The “dramatic shift to smartphones” has also continued, VHA also confirmed, accounting for more than 50% of total mobile base.
The number of customers using data on handsets increased 24.2% in the year to 2.7m, while the total number of customers (including mobile broadband) using 3G services increased by 500,000 in the year to 3.5m.
VHA also insited it has “led the industry” in the number of customer service initiatives as it fights to win back disillusioned customers including 24/7 Care; a call back service for customers when wait times are longer than 3 minutes; extended support via Twitter and Facebook an enhanced coverage checker.
It has also secured an extended loan facility of $1.7 billion from a consortium of local and international banks to fund spectrum licence renewal and the continued investment in the new 3G 850MHz network and 4G network, it confirmed.
Canning Fok, Chairman of HTA and Managing Director of Hutchison Whampoa, also said he was “confident” the continued network investment will see VHA deliver stronger results this year.
