Home > Uncategorized > the north face outlet uk Vodafone Group’s VOD CEO Vittorio Colao on Trading Update for Quarter Ended 30 June 2015

Vodafone Group’s VOD CEO Vittorio Colao on Trading Update for Quarter Ended 30 June 2015

Hello, and welcome to today’s Vodafone Group Analysts and Investor Call. Throughout this call, all participants will be in a listen only mode and after, we have question and answer session. I’m very pleased to present the Vodafone Group’s CEO, Vittorio Colao. Please begin.

Thank you, Hugh. Good morning, everybody. Welcome to our trading statement for the first quarter of 2015, 2016. I will take you through the highlights, and update you on our strategic and commercial developments; and then, Nick will update you on our financial performance, and take you through the trends in our six key markets; and then, we will open for Q So I will start with Slide 4, the highlights for the quarter. Group organic service revenue was up 0.8%, which is the second consecutive quarter of growth after the 0.1% of Q4. Excluding mobile termination rates, it was 1.4% in Q1.

I am pleased to say that we are now growing most of our markets. We continue to see strong growth in our emerging markets, driven by continued customer growth and by data adoption. Growth in AMAP was 6.1%, compared to 5.8% in the prior quarter. We added 4.3 million customers in the quarter to take the total to 328 million, which is three quarters of the total Group. And total data volumes increased 97%. In Europe, the trend in organic service revenue growth continued to improve. Revenue fell 1.5% in Q1, compared to minus 2.6% in Q4, and minus 3.5% in Q3.

This improvement reflects, essentially, three things: ongoing stabilization in many of our European markets, the benefits of Project Spring, and higher data usage. Project Spring continues its momentum. The mobile build program is now 71% complete, and we remain on track to conclude by March of next year. Our European 4G coverage increased to 75%. This is up 23 percentage points over the year since we started the program, and 43 percentage points since we started the program in September 2015. We expect to reach 91% by March, next year.

Project Spring is beginning to support our commercial execution as the rise in data and 4G take up has helped to reduce churn, and to stabilize ARPU. Data traffic growth remains strong with a growth of 78% year on year across the Group. This is driven by a 15% rise in users, and 54% increase in usage per customer. Across the Group, we now have 24 million 4G customers; therefore, we are clearly, today, the market leader in this space.

Moving to enterprise, the business has grown for the second consecutive quarter with service revenue increasing now 1.8%, this is compared to 1.4% in the previous quarter, supported by improving customer growth; higher data usage, despite some ARPU pressure. In unified communication, we continue our good progress. We added 264,000 fixed broadband customers during the quarter, taking the total to 12.3 million. We also expanded our offers. We have a first fully converged service, Vodafone One, in Spain, and the data launch of our fixed broadband in the UK.

Our organic fiber build programs are also progressing well, bringing the total number of households reached to 26 million; or 62 million if we include the wholesale agreements. And finally, let me add that a few weeks back we announced that we were in early discussions with Liberty Global regarding the possible exchange of selected assets.

Today, I have no further update for you on this; and, for that reason, I’m sure you will understand that we will not be taking any questions on the subject. So, let’s go a little bit into the details now. Overview of the growth in business, its chart on Page 5, it shows revenue service growth with AMAP countries in blue, and the Europe markets in red.

As you can see, AMAP remains strong; service revenue up 6.1%, as I said. Our leading network quality, distribution, and customer service continued to attract customers, with the base up 6% in the year, driving both voice and data usage. This slide also shows that revenue continues to decline 1.5% in Europe. However, we are seeing a more stable pricing environment in many markets.

And, as I mentioned earlier, better commercial performance and higher data adoption, which have helped to improve churn rates and stabilize ARPU in some markets. We had a very strong quarter of 467,000 contract net additions in Q1. The same number a year ago was 77,000. I will say more on our commercial performance a little bit later. I’d like now to turn to progress against our key strategic initiatives for Spring data, unified communications, and enterprise.

Turn to Slide 6, please. Top left, you can see that we have made good progress on our Project Spring program, and that we are at 71% through the mobile build program. 13,500 new base station sites were added in the period, including 8,500 in Europe; 2,100 in India; and 1,000 in South Africa. We are well on our way to having a modernized and cost efficient network. 85% of sites in Europe now have high capacity backhaul, able to carry more than 1 gigabyte per second of data; and 28% of sites have fiber to meet the higher needs in urban areas.

Based on various internal and external measures, we either lead or are co lead in 17 out of 20 of our markets for data network quality. Now, top right of the chart, as you can see here, the build program has had a positive impact on our customer experience. Our outdoor population coverage in Europe is now 75% for 4G; up from 52% a year ago, and 82% for 3G or 4G in AMAP. We remain on track to meet our coverage targets for the end of the financial year. 89% of our data sessions are now in excess of 3 megabytes per second. This is the speed that typically is required for watching HD video.

A reliable network is crucial for customers. We also have reduced our dropped call rate in Europe to 0.6%, and less than 1% in AMAP. When we commenced the program in September 2015, the rates were 0.9% and 1.3%, respectively. Fixed network deployment is shown on the bottom left of the chart. Here, we have extended our own high speed network generation coverage by 1 million to 26 million households in Europe. This reflects builds in Italy, in Spain, and in Portugal. With the launch of the broadband in the UK, we added 19 million premises to our wholesale reach. So our total NGN coverage is now 62 million, which represents around 40% of the households existing in Europe. Going forward, our existing self build plans will increase the number of homes reach by a further 7 million over the next couple of years.

Let me now turn to the commercial part of Spring. This chart, Slide 7, shows, overall, that we are maintaining our good progress. Starting from the top left, we have increased our 4G customer base. The red bars show that we are 22 million with 4G smartphone and plan. This will be 24 million including other devices. The chart also shows that the proportion of customers who have a device and the plan is up to 76%, compared to 53% last year. Despite the growth in 4G, it is still only used by 15% of our customers in Europe, and it only accounts for 35% of data volume. A year ago, these figures were 4% and 19%, respectively, which shows both the progress we have made and the potential to grow 4G.

Moving to the top right, you can see here that the average data usage per customer on a smartphone is rising rapidly with 54% growth over the year to over 800 MB. On the very high end devices, the usage is 2.3 gigabyte. This trend is helped by the uptake of 4G, as its usage is twice that of 3G. We continue to push content, combined with 4G, to stimulate data usage. During the quarter, we improved our content offers. We launched Napster in the Netherlands; Netflix in New Zealand; and Spotify in both Portugal and Ireland. So with more take up of 4G and smartphones and usage, the growth opportunity remains, in our view, significant. Growth in users and usage has driven overall data usage up 78%, comprising 64% in Europe and 97% in AMAP.

And finally, as can be seen in the bottom left chart, our better mobile network and commercial focus on 4G has led to a reduction in churn in all major markets. This is important. The ever reduction across Europe has been 4 percentage points over the two years, and 2 points in the last quarter alone.

Bottom right, you see the other side of the story: consumer content ARPU is stabilizing quarter on quarter in a number of our main markets. This, combined with customer growth, is leading to better revenue trends. Clearly, ARPU is still down year on year overall, and particularly in Spain, and Nick will cover the trends a little bit later.

Slide 8, enterprise. Enterprise business has grown for the second consecutive quarter with service revenue increasing 1.8%. The rate of growth is now positive in most of our enterprise markets. This results from continued growth in the fixed segments of enterprise, which now accounts for 28% of service revenue across the Group; and, of course, better trends in mobile. Our enterprise business is, on the whole, seeing good customer growth. But this is being offset by continued ARPU pressure, as we come up against stiff competition to retain and to attract customers.

In terms of the strategic growth areas of enterprise, IP VPN network expanded to 64 countries now, and to 251 points of presence. The machine to machine segment, we increased the number of connections to $22.9 million, and we won a number of significant new contracts. Revenue here grew 22%, compared to 28% in the previous quarter. Our Vodafone Global Enterprise business grew 3% on an underlying basis, which takes into account the phasing of revenues. This area continues to benefit from more companies wanting a single provider of services across multiple borders.

And finally, cloud and hosting revenue increased 10.5%, against 16.8% in Q4. And on the fourth area of our strategy, unified communication, on Page 9, this is an area where, again, we have made significant progress during the quarter. Fixed is now 25% of our revenues in Europe, and around one quarter on enterprise revenue. Top left chart shows that fixed revenue has now grown for the second consecutive quarter in Europe. This reflects continuing momentum on fixed broadband net additions in Q1 with around 264,000 across the Group, of which 216,000 were in Europe.

Vodafone has today 12.3 million fixed broadband users globally, and 11.5 million in Europe, including 5.3 million NGA customers, mainly KDG and Ono. And our TV customer base is now 9.2 million. Integration of KDG and Ono continues to proceed in line with our overall business plan, and we remain on track to deliver the expected synergies, as targeted.

As I said earlier, our NGN coverage is now 62 million homes, so our penetration of customers, at 9%, is still low. We are pushing hard to provide a new converged proposition to drive this higher with the launch of new offers in the UK and Spain, with more market to follow by the end of the year.

And now, I turn to Nick for the details.

Thank you, Vittorio. Good morning, everybody. Before getting into the detail, I’d like to make a couple of housekeeping points. Firstly, as a reminder, the results for each country have been restated to remove the volatility of international carrier services. You can find the details for this in the web spreadsheet that accompanies the results.

Secondly, we’ve included KDG and Ono in Q1 of this year, but not restated previous periods. The contribution of these businesses adds 0.2 percentage points to growth in Q1 for the Group. Finally, from this quarter, and for future Q1 and Q3 announcements, we will no longer disclose free cash flow, CapEx; or net debt, as a result of changes to disclosure requirements in the UK.

Let me now turn to the individual key countries in order of their revenue contribution. So turning to Germany, on Page 11, the top chart shows service revenue trends with the old Vodafone only bases in red, and the new bases, including KDG, in black. KDG added around 1.5 percentage points to the quarter’s growth rate. Therefore, the underlying performance improvement in growth between Q1 and Q4 was around 0.7 percentage points.

As you will be aware, our performance in Germany over the last couple of years has been impacted by three factors: network issues, the repricing of the back book, and the need to rebalance our channel mix. The mobile network issues are behind us. We added 300 4G sites to increase 4G coverage to 78%. Over 1,300 sites were modernized with Single RAN in the period, taking the level of modernization of the network to 85%. And dropped call rates improved by 30% year on year to 0.54%.

The back book repricing has been ongoing for around 20 months, and still has another three months to four months to go. As Vittorio has already shown, consumer contract ARPU was broadly stable quarter on quarter. The channel mix for new customers is also improving, with an increased share of customer additions coming from direct channels, delivering higher intake ARPU. We have also gone back into indirect channels in a more balanced way.

Turning to performance in the period, mobile service revenue fell 2.1%, due to the ongoing repricing, driving consumer contract ARPU down 6.6% year on year. The enterprise segment is still competitive, but our customers’ net additions performance remains robust. We continue to see growth in the contract customer base, up 104,000. Contract churn fell to its lowest level in three years to 13.8%. Fixed revenue grew 0.2%, with net broadband additions of around 70,000, comprising a modest decline in the DSL business; and 100,000 additions in KDG, including migrations. As a reminder, we strengthened our competitive position with the purchases spectrum in the recent auction, which was paid in the quarter. We were particularly pleased to gain more 1,800 megahertz spectrum for 4G services, where we were previously spectrum constrained, taking our holding to 25 megahertz of paired spectrum; up from 5.4 megahertz.

cheap longchamp
moncler outlet uk
cheap the north face
ray ban sunglasses uk
longchamp outlet uk
ray ban outlet uk
michael kors outlet uk
cheap longchamp uk
cheap moncler uk
cheap longchamp bags
the north face outlet uk
cheap ray bans
cheap ray bans uk
cheap michael kors
cheap michael kors uk
cheap north face