VHA expects fresh round of customer losses

Vodafone Hutchison Australia expects its customer numbers to take a further short-term hit after executing a clean out of users who generated very little to no revenue.

CEO Bill Morrow warned media today to expect "some big numbers" in customer loss figures in the next batch of financial results, in part owing to an accounting "clean up" and the telco's strategy when migrating customers from its closed 3 brand onto the Vodafone network.

"This year there will be [customer] losses throughout the entire year," Morrow said. "At the beginning of next [calendar] year we see this going into neutral to positive territory."

Morrow said the accounting clean-up was used to identify a "large number of non-tolling customers" that the telco had cut out of its customer base.

"[With] past practices, we would go to customers and say, 'you have a basic service with us. Why don't we just give you this other SIM card, you plug it into anything that you want and we hope that you will use it and therefore become a generating customer number'," he said.

"But the reality is [they] tossed the SIM card into a drawer, didn't do anything with it, but we've been showing it as a customer.

"We've gone in and basically said, 'listen, let's remove those as customers because they're not bona fide customers'. So we took all of that in this second half of this year."

Vodafone's shutdown of 3's mobile services will also contribute to some customer number losses, according to Morrow.

"We migrated 1.2 million subscribers over [from the 3 network] but there's still a large number of 3 customers that are in a very low monthly spend category that just did not want to move because this was typically either a 2nd or 3rd service or something they threw in the glovebox of a car for safety reasons," he said.

"We weren't generating a whole lot of revenue from them so we kind of closed them out."

Morrow declined to reveal the proportion of the 1.2 million subscribers that had been closed out, but indicated the information could be shared when end-of-year results are announced early next year.

Future fixed-line focus

Morrow also said while it is not an immediate focus, he still believes VHA will need to branch into a fixed-line service offering at some point.

"VHA have said for quite a long time now that NBN will be its natural foray into the fixed line business to be able to complement triple play type services, but the NBN schedule keeps floating around," he said.

"We don't think it's an immediate concern of ours. It's not 2014, it may not even be 2015, but by the time we head to 2016-17 we are going to have to have some [idea] of how we're looking at [fixed-line].

"We need to see how NBN plays out and these other kinds of shifts and moves within the marketplace."