Vodafone Germany service revenue growth improves in Q2 as customer base grows

Tuesday 14 November 2017 | 08:35 CET | News

Vodafone Germany reported service revenues up 1.6 percent in its fiscal second quarter, an improvement from 0.6 percent annual growth in the previous quarter. Excluding regulatory effects, the operator said service revenue was up 3.0 percent, driven by improved mobile contract customer growth, which more than offset the drag from roaming price cuts in the EU. 

Mobile service revenue improved to growth of 0.7 percent in Q2, as a higher customer base offset regulatory headwinds. Excluding regulation, mobile service revenue grew 2.8 percent. The mobile customer base increased by 163,000 versus June, as 217,000 contract additions offset the loss of 380,000 prepaid customers. In total, Vodafone Germany had 30.675 million customers at the end of September, and the share on postpaid rose by 1 percent point year-on-year to 55.8 percent. 

Vodafone said postpaid growth was driven by seasonal demand for its new GigaCube fixed-wireless proposition, higher activity in direct channels and lower consumer churn. The business market meanwhile remained difficult, but Vodafone said ARPU declines continued to moderate. Total ARPU of EUR 15.3 was down from EUR 15.5 a year ago but up from EUR 14.9 in Q1. 

Fixed service revenue grew 3.0 percent year-on-year in Q2, down from 3.4 percent growth in Q1. Broadband customers increased by 94,000 in the quarter to 6.452 million, including 24,000 net additions over DSL and 71,000 in cable, while the TV customer base reached 7.710 million at the end of September, down by 24,000 from three months earlier. Vodafone said the number of customers taking both fixed and mobile services increased by 61,000 in the quarter, driven by its GigaKombi bundles, to reach 532,000.

Adjusted EBITDA grew 7.7 percent over the first half of Vodafone's fiscal year to EUR 1.929 billion, driven by service revenue growth of 1.1 percent to EUR 5.062 billion and strong cost control. As a result, the adjusted EBITDA margin improved by 2.6 percentage points to 36.6 percent.

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