Vodafone ‘encouraged’ by converged progress
February 6, 2020
Vodafone reports converged offers in markets where it merged with Liberty Global last year have added over 10 per cent to revenue.
Excluding the VodafoneZiggo JV with Liberty Global in the Netherlands, Vodafone had 24.7 million fixed broadband customers, including 21 million ‘next-gen network’ customers, seven million converged customers and 22 million TV customers in Europe at the end of Q3. It added 204,000 broadband subs, 417,000 NGN customers, 142,000 converged customers and 47,000 TV customers during the quarter.
CEO Nick Read said that Vodafone continued “to see a significant opportunity to increase sales of multi-product bundles, especially in fixed line where we have Europe’s largest NGN footprint and relatively low customer penetration”.
Read said that Vodafone was “progressing well on integrating the acquired Liberty Global assets in Germany and CEE and are confident that we will deliver the €535 million of targeted annual cost and capex savings by the fifth full year post completion”.
Group revenue for the quarter increased by 6.8 per cent to €11.75 billion, including an increase of 10.1 per cent in Europe offset by a 2.7 per cent decline elsewhere. However, in like-for-like terms, European revenues fell by 1.4 per cent, while the rest of the world rose by 9.1 per ent.
In Germany, DSL migrations to the Unitymedia cable footprint dragged on Vodafone’s organic growth somewhat. Unitymedia, the cable operator acquired from Liberty Global, added 153,000 net cable customers in Q3, supported by 52,000 migrations from DSL. However, the service provider’s TV customer base declined by 73,000.
In Spain, Vodafone’s other main cable market, the group’s total TV subscriber base grew by 56,000, supported by new TV and series offers and despite its decision last year not to renew football rights, which previously has seen customers migrate to other providers. Q3 was the first quarter of mobile contract, broadband and TV customer base growth since the Q3 of financial year 2017-18.
Meanwhile reaffirmed his estimate it would take five years and €200m to comply with the UK government’s and the EU’s restrictions on Huawei in 5G, including stripping their kit from the existing 4G core.