Vodafone celebrates usage rise

By Nick Stride

Friday 15th November 2002

Vodafone New Zealand this week trumpeted a strong September first-half result, contrasting it with Telecom's lacklustre mobile performance.

Revenue rose 18%, ebitda (earnings before interest, tax, depreciation, and amortisation) 34%, and customer numbers 5.6%, to 1.156 million. Average revenue per user (ARPU), a critical measure for mobile companies, increased 6%.

Managing director Tim Miles predicted another "very strong" full year as new services drove up ARPUs.

Mr Miles said the Vodafone Live service would be launched here "in the coming months."

Forrester Research has described the service, launched in seven European countries last month, as "the killer cocktail." It gives subscribers access to picture messaging, chat, email, gaming and content.

Forrester noted the cost, at E299 for the Sharp GX10 handset and E5 for the smallest data download, was beyond the target 20-something market but predicted Vodafone would bring prices down to meet competitors' by the end of the year.

For the year to September Vodafone's monthly ARPUs were $25 a customer for prepaid and $153 a month for "contract" or post-paid.

Telecom figures for the June year were $6.70 for prepaid and $72.20 for post-paid.

Telecom's mobile revenues rose 5% to $761 million, mostly as a result of rises in interconnection charges.

For the September first quarter Telecom's mobile revenue rose 5% to $189 million but cost-cutting saw ebitda climb 41% to $72 million.

Mr Miles said ARPUs had proved very hard to grow in recent years. "They're the real measure of whether you're delivering value to your customers."

He confirmed Vodafone had been in discussions with Econet Wireless, the South African-based contender which plans to launch a third mobile service using Vodafone's cell towers.

Vodafone won't release its half-year dollar revenue and earnings figures until September 30.

In the last March year revenue rose 30% to $702.8 million. Net earnings were $48.9 million (2001, $41.4 million) after finance costs of $48.5 million ($12.3 million) and tax of $28.5 million ($18.2 million).

The local company's parent, British-based Vodafone Plc, last week announced September half-year revenue up 67% to £15 billion and ebitda before "exceptionals" up 68% to £5.6 billion.

But heavy capital spending has been weighing on the bottom line. The company reported a £4.34 billion net loss, down from the previous year.

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