First Vodafone Australia 5G site to go live 'within weeks'

Vodafone Hutchison Australia (VHA) has seen its revenue decrease by 3%, mobile customer base shrink by 5%, and its net loss blow out from AU$124 million last year to AU$279 million for its 2019 full year.

On the positive side, the company grew its fixed-line broadband customers to 114,000 and posted a 7% increase in earnings before interest, tax, depreciation and amortisation (EBITDA) to AU$1.18 million.

The company used its full-year results to announce it would switch on its first 5G site “within weeks”. The company said in December it had moved from using its LTE equipment provider Huawei to Nokia for its 5G network, with its first site to be in Parramatta. Vodafone has 650 5G sites currently “in progress”. It added its commercial launch of 5G would occur in “mid-2020” and that it has plans to build several thousand sites in the coming years.

The first 5G device the company will sell is the Samsung Galaxy S20, with CEO Iñaki Berroeta adding he believes the number of 5G devices sold in Australia will be limited.

“I don’t think there will be a material amount of 5G devices in the Australian market until the end of 2021,” he said. “And for that reason, the capacity that needs to be dedicated to 4G is still much bigger than 5G.”

Vodafone said its 2019 year was surrounding by uncertainity — from its Federal Court fight to have its merger with TPG approved, to the ban on Huawei telco equipment in Australia — and it was not able to take an “aggressive commercial approach” like its competitors.

The telco now has 5.74 million mobile customers overall, down 5%, which is comprised of 3.4 million postpaid customers, down 1% on the same time last year, 2 million prepaid customers, down 8.6%, and 310,000 customers with virtual operators, which was down 13%.

See also: TPG and Vodafone Australia to merge into AU$15b telco named TPG

“Our prepaid customer base was impacted by a cleanup in Q4 which removed 94,000 prepaid customers who were not generating revenue, and we also made a decision to not target marginally profitable or unprofitable prepaid channels,” VHA acting chief financial officer Sean Crowley said.

“In our first full year in the fixed broadband market, our Vodafone NBN base more than tripled, with more than 40% of customers connected to the 100 speed-tier.

“Overall, we are pleased to achieve our EBITDA result, mitigating the decline in revenue through careful management of our operating expenses.”

Following its win in Federal Court earlier in the month, Berroeta said the deal would allow it to speed up its 5G rollout.

“For the first time, Australia will have a strong third converged telco as the same time 5G is coming in,” he said at the time.

Berroeta added the telco would not be using the 700MHz spectrum that TPG purchased at an ACMA auction until the merger is completed. He also ruled out accessing that spectrum through a lease arrangement while the details of the merger are sorted out and the process is formally completed.

The ACCC is still able to appeal the decision.

Updated 26 February 2020, 2:47pm (AEDT): Additional comments from Vodafone CEO Iñaki Berroeta about 5G was added.

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