• Catch issues early, fix them fast – Free trial


    [ad] With GFI Cloud you can easily manage and secure your remote workforce – wherever they are, from wherever you are! The simple IT management platform includes patch management, antivirus, web protection, monitoring and remote control. Get the benefit of endpoint protection with the ease of central management. Start a free trial now.


  • Great articles on other sites
  • RSS Great articles on other sites

  • News, Telecommunications - Written by on Thursday, November 15, 2012 9:58 - 17 Comments

    Vodafone loses 154k more customers

    news Ailing mobile telco Vodafone has revealed it lost a further 154,000 customers in the three months to the end of September, with the continued customer churn piling on more financial woes for the company and signalling that the company’s internal transformation under new chief executive Bill Morrow may not yet be having a positive impact.

    In the UK-based Vodafone Group’s financial results briefing session this week, Vodafone revealed that its Australian division had lost 77,000 customers in the three months to the end of September. As Vodafone Australia (VHA) is half-owned by the global Vodafone Group, with Hutchison owning the other half, each stakeholder only reports half of the applicable financial results; meaning Vodafone Australia is believed to actually lost 154,000 customers in total in the period.

    Elsewhere in Vodafone Group’s financial results, the company said “the continued weakness is brand perception and [mobile termination rate] cuts” in Australia meant that revenue from mobile services declined by 14.8 percent in the period.

    Asked about the issues during an investor briefing, Vodafone Group’s chief executive for emerging markets and Australia, Nick Read, highlighted continued improvements the company has been making to its network and customer service capabilities.

    “I think what my boss says on a regular basis is: ‘But is it translated into commercial performance and financial performance?’,” he said. “So just focusing on that; if we take call complaints, they’re down by two thirds from the peak. If we take contract postpaid handset churn, it peaked around sort of mid-30%’s. It’s now mid-20%s and improving. Prepaid active base is now stabilising.

    “So the really important data point is service revenue quarter over quarter. Quarter 1 we were down -4.5%, but this quarter we’ve stabilised, so we’re virtually flat, quarter over quarter. So what I’d say is, customers are starting to understand that there is a material improvement in the network. We’ve made good advances in the quality, stabilising revenue, improved customer value management is improving our A&R metrics and of course you heard our restructuring. So my view is, next fiscal year, starting to get back into the double-digit EBITDA margins that we expect.”

    “Our job is to turn around the operations, so we’re absolutely focused on that,” Read added. “We’ve got a great management team under Bill Morrow. I was down there July, I was down there September. I’m meeting again in November. I think that shows how much time and attention it’s getting.”

    Several weeks ago, Morrow announced a number of major initiatives that he said would help get Vodafone Australia back on track; ranging from making up to 500 staff redundant to appointing number of senior executives and re-focusing internal investment priorities.

    The company is also progressing its plans to deliver a new 4G network next year (Telstra and Optus have already launched their 4G networks), and has successfully completed t he first test calls on its 4G infrastructure. It has also committed to delivering a substantial increase in network coverage and is “on track” to complete the remaining upgrades of its network infrastructure.

    Morrow said the company’s existing restructuring and network investment efforts were starting to pay dividends, with network improvements meaning Vodafone customers could now receive increased download speeds up to 8Mbps on 60 percent of the carrier’s network, 3G data session and call set-up rates improved to meet international Vodafone benchmarks, dropped calls reduced by one third in metropolitan areas, and first call customer care resolution rates improved by almost one third in Vodafone’s call centres.

    “Our customers are telling us they’re starting to see a difference, further demonstrated by a 50 per cent reduction in complaints to the Telecommunications Industry Ombudsman and, notably, a reduction in network-related complaints,” asid Morrow. “We are heading in the right direction, but more needs to be done.”

    “The network is beginning to improve, the customer benefits are starting to flow and we’re intensifying our network investment as we position for future growth. Our focus is providing a consistently good experience wherever and whenever our customers touch our brand. We know we are not there yet. Only hard work, further investment and an acute focus will deliver what is needed in this market.”

    Morrow concluded: “It is vital that we simplify the business to be efficient and to enable growth in the long term. We need to prioritise every dollar and internal action to count toward an improved customer experience and these changes are designed to deliver just this. We continue to face challenges, but I’m excited about the future. We’re committed to building an agile business that can finally give Australians the service they’ve been demanding from this industry for years.”

    However, there are also signs that the company is falling further and further behind rivals Telstra and Optus in the market, and that the company’s turnaround effort is not having as much of an impact on customers as it would like.

    The company has been suffering financial difficulties for the past several years, stemming primarily from the late 2010/early 2011 series of network outages popularly known as ‘Vodafail’. Vodafone has been consistently investing in its network infrastructure and customer service capability since that time in an effort to redress the problems, but the company continues to lose customers – shedding 178,000 in the first six months of 2012. The company lost a virtually identical number of customers in the second half of 2011, and about 375,000 in the first half of 2011 (although some of those were losses on paper due to changed methods of accounting for customer numbers).

    In September — unlike its rivals — Vodafone confirmed it was declining to sell Apple’s popular iPhone 5 handset to new customers, with the carrier turning away those not already on Vodafone plans, in favour of prioritising getting the hyped Apple device to its existing customer base first.

    And although Telstra recently revealed it had sold some 820,000 4G devices on its 4G network in the first 12 months of the network’s operation (including over 100,000 iPhone 5 handsets), Vodafone has yet to launch its own 4G network. Optus has also launched its rival 4G network in most Australian capital cities, but appears to be experiencing a slower rate of customer take-up than Telstra at the moment.

    opinion/analysis
    Reading between the lines here, it appears as though Vodafone was hit pretty hard over the past quarter by the launch of the iPhone 5. Vodafone has always had a large amount of iPhone customers; the company’s value-oriented packages over the first few years of the iPhone’s life in Australia saw to that. Given the network and customer service improvements it has made over the past year, you would expect the company’s customer churn to be slowing down. But as the iPhone 5 launched, Vodafone’s network churn actually appeared to accelerate. Consider that Vodafone lost some 178,000 customers in the first half of 2012, but then 154,000 alone in the past three months, while at the same time Telstra signed up some 100,000 iPhone 5 customers. If that isn’t the iPhone effect in action, I don’t know what is.

    It will be fascinating to see if this acceleration in the churn is seen in the final quarter of 2012 as well. Vodafone executive Nick Read appears to be suggesting that things look better for Vodafone Australia on a month by month basis instead of a quarter by quarter one. For Vodafone Australia’s sake, let’s hope that he’s right.

    Image credit: Matt Wakeman, Creative Commons

    submit to reddit

    17 Comments

    You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

    1. Jay Colour
      Posted 15/11/2012 at 10:28 am | Permalink |

      People only used to stay with Vidaphone because if their coverage even though they were more expensive. Good coverage is a must need for business users… But over the years competitors coverage has improved dramatically so no need to pay the higher rates….

    2. Alex
      Posted 15/11/2012 at 10:40 am | Permalink |

      A number of friends are still on vodafone. It’s still terrible. Call’s drop out almost comically to schedule (e.g. about 2 minutes in) and data coverage/speeds are awful. I don’t doubt they’re making fixes, but based on anecdotal (and revenue), feedback they’re not getting much progress.

    3. Mick
      Posted 15/11/2012 at 10:50 am | Permalink |

      Understandable as people went to Telstra and Optus for the iPhone 5 as it was an LTE handset… If the iPhone5 was not LTE this wouldn’t have happened. Also Vodafone only offered the iPhone5 to existing customers only.
      Will be interesting to see once Vodafone launch LTE next year what will happen, if they have decent plans at a better price they might claw customers back. I am waiting to see what their LTE offering will be like.

      • Posted 15/11/2012 at 1:17 pm | Permalink |

        They actually dropped by the office and gave us a free iPhone 5 a few days after it was a released, as a thank-you gift for not jumping ship. This is on top of previous things like free ipads, pushing forward the contract renewal 6 months so we could refresh our hardware, and offering us the services of some in-house app developers for free.

        I’m not a big fan of their coverage, but right now vodafone is willing to bend over backwards for business customers.

        • Northern Blue
          Posted 15/11/2012 at 1:52 pm | Permalink |

          Coverage is one big issue if you move outside of cities/towns. On the flip side that is only in Australia. Telstra and Telecom NZ dominate their home markets but Vodafone seems to have significantly better world coverage. I’ve been to many places where Telstra mobiles either don’t work or are cycled endlessly between third party providers as you move around. But the main nail for Telstra was we found we could save a fortune on our business services with Vodafone.

    4. mash
      Posted 15/11/2012 at 11:00 am | Permalink |

      Wow, turn away a ton of frenzied prospective customers who want to get an iphone 5. And don’t have a network that can provide 4G to the latest phones.

      • Karl
        Posted 15/11/2012 at 12:33 pm | Permalink |

        You think there were many people who wanted to move TO vodafone to get an iphone 5?

        • Posted 15/11/2012 at 2:37 pm | Permalink |

          Probably not.. but if they had offered it cheaper they could have won some new customers or regained some they had lost previously..

          It’s also likly that they are happy to let the early adpoters of LTE go to Telstra as they will be the ones complaining later that there data bills are high and would put more strain on the Vodaphone network..

          you dont chase customers with low RPU

      • Jason
        Posted 15/11/2012 at 4:15 pm | Permalink |

        I’d rather have Vodafone, with a stable 2G EDGE network, a rapidly improving 3G network, with 42mbps HSPA+ rollout happening this year across all cities and no 4G than Optus who only has GPRS on 2G, a 7.2mbps 3G network with 14.4mbps “upgrades” at “selected” towers, and 4G that is rolling out a glacial speed.

        Telstra is just to expensive and their 4G is still only available in the very inner city (think max 10kms outside of CBDs) and selected regional locations. That doesn’t help the vast majority of Australians who live more than 10kms from a CBD.

        • Karl
          Posted 15/11/2012 at 9:01 pm | Permalink |

          I can agree with all of that, except for the Optus 4G rollout speed. That’s pretty damn fast really.

        • Posted 16/11/2012 at 8:39 am | Permalink |

          I’d agree except I have to LOL at the “42Mbps HSPA+ rollout”. That’s theoretical. Vodafone’s AVERAGE 3G speed for HSDPA (which is theoretically 21Mbps) is 1Mbps. ONE. Does that mean the average on HSPA+ will be 2Mbps?….

          Seriously though, if Vodafone could just stop Fu*%ing around and make their CURRENT network stable, it wouldn’t be such an issue. The issue is and has been for many years, call dropouts, text message delays of hours if not days and minuscule average data rates and dropouts on data too. Even if they could get calls and texts stable, I think many people would be happy to use them as there are many people for whom mobile data isn’t that important.

        • Posted 16/11/2012 at 8:41 am | Permalink |

          Oh and also, 4G is available to about 45% of the population. Sure, they’re mostly in cities….but that’s the point, most of our population IS in the cities. Telstra are obviously going to cover them first.

          4G in regional areas will likely only come to fruition after the Digital Dividend Auction of 700Mhz is complete next year- that’ll hopefully end up producing a “Next G” style national network, except 4G upgraded from 2013-2016.

    5. John
      Posted 16/11/2012 at 12:15 pm | Permalink |

      For around 15 years I have been with Vodafone and am on the road every day never had any problems with drop outs I some times talk for more than an hour at a time (I am not using an crapple iphone) but since they started upgrading the system the service has gotten worse with my phone and wireless broadband constantly going from 3G to Edge or HSPA and dropping calls occasionally, but with the mobile broadband I use to be able to connect for over an hour and download with out drop outs or having to restart my downloads but that seems to be a thing of the past now the wireless broadband is almost unusable I have to constantly refresh the page to get it load.

      • Alex
        Posted 16/11/2012 at 12:21 pm | Permalink |

        I don’t mean to be picky but “I am not using a crapple iPhone”. In comparison with other networks, poor call quality/reception has nothing to do with the iPhone. The 2G iPhone was actually pretty bad for calls (I imported one from the States and was using it on Vodafone and the reception and call quality was poor).

        However, iPhone 3G onwards and on Telstra, and especially for the 4S and i5, the reception and call quality has been fine. On my iPhone 4S I can pretty much tell when I’m speaking to someone on Vodafone, everyone else – even Optus – is now fine too.

    6. Stevie J
      Posted 22/11/2012 at 12:56 pm | Permalink |

      I was with vodafone since 1999, always found them the cheapest with best value for money, I even beared with them for the last 2 years since the dark network days as I bought into their network fix promise…. but what I feel has been false promise/hope has led me to switch our 2 cell phones to Telstra 2 months ago, yes it is more expensive but hey, the thing works whenever we want it to!

    7. Shannon
      Posted 28/11/2012 at 12:06 am | Permalink |

      Sorry but you can’t double up vodafone AU’s customer loss (or gain) and say thats what VHA lost.
      Vodafone Group report vodafone AU’s numbers every three months, Hutchison release VHA numbers every 3 months. Voda Group’s numbers are ONLY for vodafone AU whereas Hutchison release all numbers – 3, CJ’s, Vodafone MVNOs and Vodafone AU.

      3/CJ’s/MVNOs could sit steady while Vodafone AU keep losing

    8. MTC
      Posted 04/02/2013 at 1:25 pm | Permalink |

      I am really surprised that there is anyone left at Vodafone Australia.

      I had been a customer for more than 10 years but the crappy attitude in their service centres, coupled with the poor service provided on-line, incorrect bills (and getting them corrected was just not worth the trouble) eventually became too much.




    Get our 'Best of the Week' newsletter on Fridays

    Just the most important stories, one email a week.

    Email address:


  • Most Popular Content

  • Enterprise IT stories

    • Super funds close to dumping $250m IT revamp facepalm2

      If you have even a skin deep awareness of the structure of Australia’s superannuation industry, you’ll be aware that much of the underlying infrastructure used by many of the nation’s major funds — AustralianSuper, CBus, HESTA and more — is provided by a centralised group, Superpartners. One of the group’s main projects in recent years has been to dramatically update and modernise its IT platform — its version of a core banking platform overhaul. Unfortunately, as was revealed in November, the $250 million project has not precisely been going well, and the Financial Review last week reported that Superpartners is actually close to turfing it altogether and going back to the drawing board.

    • Qld’s Grant joins analyst firm IBRS peter-grant

      This week it emerged that Peter Grant, the two-time former Queensland Whole of Government CIO (pictured), has joined well-regarded analyst firm Intelligent Business Research Services (IBRS). We’ve long had a high regard for IBRS, and so it’s fantastic to see such an experienced executive join its ranks.

    • Westpac dumps desk phones for Samsung Android mobiles samsung-galaxy-ace-3

      The era of troublesome desk phones tied to physical locations is gradually coming to an end in many workplaces, with mobile phones becoming increasingly popular as organisations’ main method of voice telecommunications. But some groups are more advanced than others when it comes to adoption of the trend. One of those is Westpac.

    • Ministers’ cloud approval lasted just a year reverse

      Remember how twelve months ago, the Federal Government released a new cloud computing security and privacy directive which required departments and agencies to explicitly acquire the approval of the Attorney-General and the relevant portfolio minister before government data containing private information could be stored in offshore facilities? Remember how the policy was strongly criticised by Microsoft, Government CIOs and Delimiter? Well, it looks like the policy is about to be reversed.

    • WA Govt can’t fund school IT upgrades oops key

      In news from The Department of Disturbing Facts, iTNews revealed late last week that Western Australia’s Department of Education has run out of money halfway through the deployment of new fundamental IT infrastructure to the state’s schools.

    • Turnbull outlines Govt ICT vision turnbull-5

      Communications Minister Malcolm Turnbull has published an extensive article arguing that the Federal Government needed to do a better job of connecting with Australians via digital channels and that public sector IT projects needn’t cost the huge amounts that some have in the past.

    • NZ Govt pushes hard into cloud zealand

      New Zealand’s national Government announced a whole of government contract this morning for what it terms ‘Office Productivity as a Service’ services. This includes email and calendaring services, as well as file-sharing, mobility, instant messaging and collaboration services. The contract complements two existing contracts — Desktop as a Service and Enterprise Content Management as a Service.

    • CommBank reveals Harte’s replacement whiteing

      The Commonwealth Bank of Australia has promoted an internal executive who joined the bank in September after a lengthy career at petroleum giant VP and IT services group Accenture to replace its outgoing chief information officer Michael Harte, who announced in early May that he would leave the bank.

    • Jeff Smith quits Suncorp for IBM jeffsmith4

      Second-tier Australian bank and financial services group Suncorp today announced that its long-serving top technology executive Jeff Smith would leave to take up a senior role with IBM in the United States, in an announcement which marks the end of an era for the nation’s banking IT sector.

    • Small business missing the mobile, social, cloud revolution iphone-stock

      Most companies that live and breathe the online revolution are not tech startups, but smart smaller firms that use online tools to run their core business better: to cut costs, reach customers and suppliers, innovate and get more control. Many others, however, are falling behind, according to a new Grattan Institute discussion paper.

  • Blog, Enterprise IT - Jul 5, 2014 13:53 - 0 Comments

    Super funds close to dumping $250m IT revamp

    More In Enterprise IT


    Blog, Telecommunications - Jul 5, 2014 12:12 - 0 Comments

    What should the ACCC’s role be in guiding infrastructure spending?

    More In Telecommunications


    Analysis, Industry, Internet - Jun 23, 2014 10:33 - 0 Comments

    ‘Google Schmoogle’ – how Yellow Pages got it so wrong

    More In Industry


    Blog, Digital Rights - Jun 30, 2014 22:24 - 0 Comments

    Will Netflix launch in Australia, or not?

    More In Digital Rights