October 4, 2008

Vodafone to Step Up Telecom Fight


VODAFONE New Zealand will probably intensify its strategy of snatching Telecom customers this year, a telecommunications analyst says.

Yesterday, the company's British-based parent, the Vodafone Group, announced a (PndStlg)6.6 billion (NZ$16.5 billion) profit and gave some scant details about its New Zealand subsidiary's performance.

They showed flat average revenue per user (ARPU) for the year to March 2008, despite a rise in customer numbers and subscribers talking longer on the phone.

An analyst said it was well placed to compete when Telecom's new WCDMA mobile network was launched in November.

Vodafone New Zealand chief operating officer James Marsh would not comment on revenue or revenue market share. However, Vodafone Group's website put Vodafone New Zealand's revenue for the year to March at (PndStlg)574 million (NZ$1.43 billion), compared with NZ$1.37 billion for 2007.

Research consultancy IDC estimates it has about 60 per cent of total mobile revenue share, with Telecom holding the balance.

Vodafone has about 52 per cent of all mobile subscribers.

IDC estimates Vodafone has about 23 per cent of total telecommunications revenue.

In the March quarter, Vodafone added a net 57,000 customers, taking its total to 2.37 million.

Telecom had 2.16 million mobile customers at March 31, 2008.

Vodafone's average monthly ARPU rose to $51.10 from $49.30 a year earlier. For the quarter ended March 2008, Telecom had a monthly ARPU of $28.20, down from $32.50.

ARPU from Vodafone's prepaid customers fell slightly from $23.40 to $23.30. ARPU from those on contracts fell from $122.80 to $115.70. The volume of voice calls rose 17.25 per cent for the year.

Mr Marsh said retail economic contractions had yet to noticeably harm Vodafone's figures.

IDC analyst Tim Shepheard said Vodafone's acquisition of Internet service provider ihug had proven a canny move. IDC estimated it had increased its customers by 114 per cent in the second half of Vodafone's last financial year.

Most of it came from an aggressive marketing campaign centred on so-called free broadband packages.

Vodafone would probably increase competition this year with added features letting home phones be used on its mobile network at competitive prices, rather than on Telecom's fixed line network.

Mr Marsh said a feature planned this year would let customers use mobiles at fixed line rates within a yet-to-be-specified radius of their homes.

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