Vodafone is seeing “encouraging” take-up of converged offers in the markets where it integrated assets from Liberty Global last year, the acquisition of which boosted its top line in Europe by over 10%.
Excluding the VodafoneZiggo JV with Liberty Global in the Netherlands, Vodafone had 24.7 million fixed broadband customers, including 21 million ‘next-generation network’ customers, seven million converged customers and 22 million TV customers in Europe at the end of its fiscal third quarter. Excluding VodafoneZiggo, it added 204,000 broadband customers, 417,000 NGN customers, 142,000 converged customers and 47,000 TV customers during the quarter.
Commenting on the company’s latest trading update, 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”.
Group revenue for the quarter increased by 6.8% to €11.75 billion, including an increase of 10.1% in Europe offset by a 2.7% decline elsewhere. However, in like-for-like terms, European revenues fell by 1.4%, while the rest of the world rose by 9.1%.
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.
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”. He said he was “encouraged by the uptake” of converged offers.
In Germany, Read said that Vodafone had already delivered its target for DSL migration to cable for the full year and added that Unitymedia stores would be rebranded as Vodafone ahead of a harmonisation of commercial offers in the spring.
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26th February 2020