Vodafone losing market share

Vodafone New Zealand, which yesterday got a boost from news TelstraClear had ditched plans to build a rival 3G mobile network, showed it was under pressure in the September quarter.

Its market share fell to 54 per cent against 54.7 in the June quarter and the company added significantly fewer new customers in the quarter than the other mobile player, Telecom, which launched its 3G network nine months ahead of Vodafone.

Vodafone added a net 27,000 customers in the September quarter, down from 38,000 in the June quarter, bringing the total number to 1.956 million. Telecom, which has been discounting its popular texting service, said it added 72,000 new customers in the September quarter to bring its tally to 1.673 million.

British-based Vodafone Group today warned that its struggling Japanese unit would curb profit margins in 2007, casting a pall over strong half-year results and sending its shares plunging more than 10 per cent.

The world's largest cell phone group by revenue said ebitda (earnings before interest, tax, depreciation and amortisation) rose to 6.7 billion pounds ($17.38 billion) on 9 per cent higher revenues of 18.3 billion pounds, topping average forecasts.

Vodafone New Zealand does not report its financial results publicly. Its figures are in the group's "other" revenue which showed margins fell to 2 points to 34.8 per cent.

The company will now return about 9.3 billion pounds to investors this year but is still armed with 15 billion pounds of balance sheet capacity.

Vodafone New Zealand said ARPU (Average Revenue per User) improved to $140 from $138.9 in the June quarter but the figure was well down on the $147.30 in the September 2004 quarter.

Prepay ARPU was steady on $26, bringing total ARPU to $51 against $52.5 in the June quarter and $50.7 in the year ago quarter.

Vodafone tripled its market share since buying the New Zealand operations from BellSouth seven years ago.

But its share has now slumped from 56.3 per cent in the September 2004 quarter.

Vodafone has been attempting to vie with Telecom's $10/month texting, popular with teenagers, and limited price off peak call offers, with an offer of free weekend texting and similar discounted off peak calls.

Telecom said it had been growing new customers numbers for four consecutive quarters faster than Vodafone.

Vodafone is hitting back with flexible marketing schemes giving customers options on six different plans.

It said voice usage totalled 559 million minutes in the quarter, compared with 497 million minutes for the same period last year.

Finance director David Sullivan said mobile connections in New Zealand outnumber landlines nearly two to one now, and intense competition was benefiting customers.

- NZPA