Vodafone Ireland reports 1.6% decline in mobile customers

Ireland’s biggest mobile operator sees Irish mobile subscribers fall by 34,000 in second quarter

 Vodafone received no relief from tough market conditions in the first quarter, with a slowdown in Spain and South Africa. Photo: Bloomberg

Vodafone received no relief from tough market conditions in the first quarter, with a slowdown in Spain and South Africa. Photo: Bloomberg

Fri, Jul 25, 2014, 13:19

Vodafone Ireland has reported a 1.6 per cent decline in mobile phone subscribers for the three months to the end of June.

The communications group saw its Irish mobile customer base fall by 34,000 to just over 2.1 million.

One possibility is that more customers are switching from using multiple devices to a single smartphone, though the company would not confirm this.

“The general economic conditions and telecommunications market in Ireland remain challenging and competitive,” a spokeswoman said.

“ In addition, there has been a significant shift of customers from pay as you go to bill pay to avail of better value through subsidised smartphone devices and bundles.”

In an interim management statement, Vodafone Ireland reported average revenue per user (ARPU) - a standard metric by which telecom companies rate their performance - fell by 2 per cent year-on-year to €28.6 in the quarter.

The company maintained a total Irish customer base of 2.4 million, and remains Ireland’s the mobile market leader.

The sustained increase in smartphone penetration and data usage continues to be evident, it said, adding that the number of customers using smartphones on the network reached 63 per cent of the total customer base during the period.

The company recently signed a joint venture agreement with the ESB to invest €450 million in building a 100 per cent fibre broadband network across Ireland.

This would place Ireland in the ranks of the world’s fastest broadband countries, it said.

Internationally, the telecoms group, which is now world’s second-biggest mobile operator, reported tough trading conditions with a slowdown in Spain and South Africa resulting in another heavy drop in its key revenue measure.

The company said the pace of decline in organic service revenue, which strips out items such as handset sales and currency movements, accelerated to 4.2 per cent in the three months to June 30th.

That compared with a rate of 4 per cent, including a full contribution from Italy, in the last quarter of its past financial year.

Chief executive Vittorio Colao said the year had started in line with the company’s expectations, and its performance had improved in markets such as Germany.

“Through our commercial actions and investment, our performance is beginning to stabilise quarter-on-quarter in several of our European markets, with customer appetite for 4G services clearly growing,” he said on Friday.

The limited number of analysts who provide forecasts for the first quarter expected group service revenue to decline by 4.2 per cent.

Vodafone is spending £19 billion on a network-improvement plan through March 2016, putting funds into faster wireless technology and expanding its broadband systems.

The company is working to offer more services, combining mobile phones with fixed Internet and TV, to combat price wars and sagging economies in its biggest markets in Europe.

Additional by reporting by Reuters