Vittorio Colao hails positive financial results as investment starts to deliver
Vodafone Group CEO Vittorio Colao says its £20 billion Project Spring investment to improve its network is finally “starting to deliver” after the operator’s latest financial results showed a small growth in service revenue, which he called “a turning point”.
The Group posted EBITDA of £5.8 billion for the six-months up to September 30, up 1.9 per cent organically, as service revenue grew 1.2 per cent to £18.4 billion. Colao (pictured) credited the improving performance to Project Spring, which he said is now 80 per cent complete – up from 63 per cent in May.
Spring was launched in 2013, with plans to invest more than £20 billion by 2017. In the first six months of this financial year, it invested £3.7 billion across the Group, with £374 million of that spent in the UK.
Speaking at a half-year results dinner in London last week, Colao said Vodafone is now investing £1.5 billion in the UK every year, and has seen its 4G coverage reach 82 per cent, with 99 per cent of London offering the faster connectivity. Its 4G base has grown from 1.1 million in September last year to 5.3 million, making up just under a third of its 18.3 million UK subscriber base.
Colao said this year has been a “turning point” for the operator both financially and in terms of its performance. Seven out of Vodafone’s 13 European markets are now back in growth, including the UK, where the operator posted increased operating revenue of £3.08 billion, and saw EBITDA grow organically by 1.1 per cent year-on-year to £669 million.
“This is a turning point for Vodafone, and we will be cash positive by the end of the financial year,” said Colao. “Project Spring is going well, we’re getting 80 per cent through in mobile and can serve 66 per cent of homes in Europe. We’ve got the largest 4G network in Europe with 30 million 4G base.
“Project Spring is starting to deliver. We’ve had the highest number of net adds in Europe over the last three months for our last five quarters (608,000). Customers like our improving network – we’ve got lower churn in all markets.
“ARPU is also stabilising. Why? Because customers are using a lot more data, they are getting more bundles and more packages – 29.9 million 4G customers in Europe, 20 per cent of our customer base. Customers are paying more or less the same compared with 3G but they are getting a lot more for their money, and using a lot more.”
Vodafone launched its consumer broadband offering last month, with the operator’s financial results revealing it has 75,000 broadband customers in the UK.
Colao said he is aiming for that number to reach “several hundred thousand” by the end of the financial year (April 2016), with a number of services, such as pay TV (which can be used on multiple devices). Vodafone already offers TV subscription services in a number of countries including Spain and Italy. In the UK, new customers received up to one year of free access to online entertainment service Netflix when signing up to its home broadband service, as well as free evening and weekend calls.
New to the game
Colao added: “We have put Vodafone UK in the right space now. We were all about mobile and enterprise, before we made the investment in Cable and Wireless. That has strengthened the fixed side, but we only launched our fixed line offering a month ago. We will be integrating TV into it in the next quarter and will have the full set of products and services.
“We will not be in the driving seat in the UK for broadband – that will be the likes of BT/EE and also Liberty (Virgin Media), Sky and others, because we are new to the game.”