VHA growth continues in 2016 ahead of fixed broadband launch

Steps up fixed broadband preparations

Vodafone Hutchison Australia (VHA) continued to perform solidly throughout 2016 with growth in its customer base and key financial metrics as the company prepares for the launch of fixed broadband services later this year.

Key performance highlights:

  • Total customer base grew by 125,000 customers to 5.56 million, 2.3% increase YoY
  • EBITDA increased 12.2% YoY to $912.1 million
  • Revenue excluding MTR* increased 5.7% YoY to $3,211 million
  • ARPU excluding MTR* increased 3.6% YoY to $43.77
  • Loss decreased 43.8% YoY to $241.8 million
  • Free cash flow positive

VHA Chief Financial Officer James Marsh said the results were pleasing, and followed a continued focus on long-term, sustainable growth.

“The business is doing well, and ultimately what’s behind our performance is our excellent network, innovative products that deliver great value to our customers, and the high standard of service customers receive from us,” Mr Marsh said.

“Significantly, the business was free cash flow positive for the first time since the merger in 2010, and this has been driven by an increase in EBITDA and sound cash management.

“VHA’s double-digit EBITDA growth, which is a key indicator of the company’s increasingly solid performance, was mainly driven by the uplift in customer base and ARPU complimented by continued cost management.

“The growth in our customer base was driven by the post-paid segment, with consumers attracted to our customer-friendly propositions such as $5 Roaming and $0 Roaming to NZ, and Red plan products.

“Our international roaming products, which are unrivalled in the Australian market, give customers the freedom to use their mobile while overseas, and in 2016 we saw a 42 per cent increase in VHA’s roaming revenue.

“Through our continued heavy network investment, our network is going from strength to strength, and was recently independently ranked as the top performing Australian mobile network in major cities#.”

VHA Chief Executive Officer Iñaki Berroeta said VHA was well-placed for further growth in 2017 through its continued focus on network, products and customer service, and the launch of fixed broadband services via the National Broadband Network.

“To continue growing the business, we’ll keep focusing on the things that are important to our customers,” Mr Berroeta said.

“That means continued network investment, products that put customers in control and great customer service. And to complement our mobile business, we’re getting ready to launch fixed broadband services later this year.

“Since we announced our plans to launch fixed broadband services, we have received significant interest from customers who want to be connected to VHA at home and at work, as well as on their mobile.

“There is a deep frustration from broadband consumers about the service they’re receiving from their existing internet service provider, and we want to change the game.

“In recent months, we’ve stepped up preparations for fixed broadband, especially around products and service capabilities, and we’re excited about launching this service to customers later in the year.

“In the months leading up to launch, we will be conducting service trials to make sure we get things right, and taking expressions of interest from customers.”

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Background

Vodafone Hutchison Australia (VHA) is 50:50 joint venture between Vodafone Group Plc and Hutchison Telecommunications (Australia) Limited. Figures relate to VHA performance for the 2016 full year.

*In a year on year comparison, VHA’s revenue increased 5.7% and gross ARPU increased 3.6% if incoming revenue impacted by the Australian Competition and Consumer Commission’s reduction of industry mobile termination rates (MTR) is excluded. Driven by the changes in MTR, which were effective 1 January 2016, VHA revenue declined 8.4% to $3,345.2 million and gross ARPU decreased 12.4% to $45.87.

# VHA ranked as the top-performing network in Australia’s cities with a population over 100,000 for aggregate voice and data in the independent CommsDay P3 network benchmark tests released in December 2016.