Vodafone sees TV and convergence growth despite problems

Despite being weighed down by the write-down of its Indian business and problems in the UK, Vodafone has posted solid year-end numbers, boosted by the success of its convergent offerings, and has raised its guidance for underlying profit growth.

Vodafone had 9.8 million TV customers at the end its financial year, rising to 13.8 million if its Dutch JV with Liberty Global, VodafoneZiggo, is included.

Vodafone now has 14.7 million fixed broadband customers, or 17.9 million including VodafoneZiggo, with 1.5 million new broadband customers added in the year. Of these, 7.7 million take a high-speed service over fibre or cable.

In Germany, Vodafone added 433,000 net customers over the year, including 123,000 in the quarter to March, of which 320,000 were cable customers. The company said that its GigaKombi convergence offering had been taken up by 357,000 customers. Vodafon’s German TV base – which accounts for the bulk of its overall TV base – numbered 7.7 million at the end of the last quarter.

In Spain, Vodafone’s TV base reached 1.3 million, up 246,000 year-on-year including 30,000 additions in the final quarter.

Convergence was again the main story for Spain, with the company’s Vodafone One fixed, mobile and TV combination reaching 2.4 million customers at the end of the financial year.

The UK was Vodafone’s poorest performing market in Europe, with revenues lagging behind a modest operational recovery following the badly executed introduction of a new billing system in 2015. The UK unit’s small fixed-line operation added 33,000 broadband customers in the quarter to March, taking the total to 216,000. Vodafone has reportedly put plans to introduce a TV service to the UK on ice indefinitely.

Overall, Vodafone suffered a €6.1 billion loss for the financial year, with the shock writing down of the value of its Indian unit last year and customer service problems in the UK weighing it down.

The company has since mounted something of a recovery, and posted full-year revenues of €47.6 billion, down 4.4%, and adjusted EBITDA of €14.1 billion, flat year-on-year but up 7% on an organic basis.