Vodafone's average revenue per customer falls

Vodafone Ireland's average monthly revenue per user (Arpu) dropped 5.7 per cent in its financial first half to €42

Vodafone Ireland's average monthly revenue per user (Arpu) dropped 5.7 per cent in its financial first half to €42.50 from €45.10 a year ago.

The telecoms operator reported a 0.6 per cent increase in its mobile subscriber base to 2.23 million at the end of September compared with the same period 12 months ago. However, its mobile subscriber numbers have declined slightly over the last two quarters and were 0.7 per cent lower in September than in June.

Voice usage on the Irish network increased over the period with total voice minutes used rising 6.8 per cent to 1.62 billion when compared with September 2007.

On average Irish customers spoke for 248 minutes and sent 143 messages in the second quarter compared to a European average of 147 voice minutes and 74 text messages.

Vodafone Ireland said subscribers to its mobile broadband service exceeded 94,000 by the end of September. This is up over 100 per cent over the last 12 months.

The company said its fixed line voice and broadband products had 76,621 customers at the end of September, bringing its total telecoms customer base to 2.31 million. This includes the operations of its wholly owned subsidiary Perlico and Vodafone's own fixed line service.

The Vodafone Group cut its full-year revenue outlook and will reduce costs by £1 billion, but it increased its forecast for free cash flow after reporting first half results slightly ahead of expectations.

The world's largest mobile phone company by revenues, which also maintained its forecast for adjusted operating profit, now expects full-year group revenues to be between £38.8 billion sterling (€47.3 billion) to £39.7 billion.

It is the second time Vodafone has cut the forecast after saying in July it expected full-year revenues at around the bottom of its previously forecast range of £39.9 billion to £40.7 billion.

"Operating conditions are expected to continue to be challenging in Europe given ongoing competitive and regulatory pressures and recent economic conditions in certain markets," the group said.

"Whilst the current economic environment is also impacting emerging markets, increasing market penetration is expected to continue to result in overall strong growth for the EMAPA (emerging markets) region."

Analysts said first half results were good and the revenue cut had been expected, and they welcomed the company's comments on free cash flow and the dividend.

The group said it would introduce a "progressive" dividend policy.

First half revenue was slightly ahead of forecasts, up 17.1 per cent at £19.9 billion, earnings before interest, tax, depreciation and amortization (EBITDA) were in line with forecasts at £7.2 billion and adjusted operating profit was up 10.5 per cent to £5.8 billion.

Analysts had been expecting first-half revenues of £19.6 billion, EBITDA of £7.2 billion and adjusted operating profit of £5.6 billion, according to Reuters Estimates.

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Additional reporting Reuters

David Labanyi

David Labanyi

David Labanyi is the Head of Audience with The Irish Times