Vodafone's Australian Angst

While Vodafone Group plc (NYSE: VOD) appeared to be rather pleased with itself on Tuesday as it reported solid first-half earnings and an upbeat outlook for the rest of the fiscal year, the operator has had a bad time with its business in Australia. (See Euronews: Vodafone Upbeat on Full-Year Outlook and Vodafone Smartens Up for Smartphones .)

Vodafone Hutchison Australia is still reeling from a major service disruption that started at the end of 2010 when the operator installed new software in two parts of its network, which caused problems such as dropped calls, slower data speeds and delayed SMS and voicemail messages. Vodafone's service revenue in Australia dropped by 8.1 percent in its second quarter, which ended September 30, and the operator lost 27,000 customers in the period, which brought the customer base to 3.4 million in the country.

Indeed, new figures released this week from Australia's Telecommunications Industry Ombudsman (TIO) show that complaints about Vodafone's service tripled to more than 32,000 in the 2010/2011 year, compared with the previous year. The TIO reported that, overall, the regulator had a record number of 197,682 service complaints registered in the 2010/2011 year, an increase of 18 percent compared with the previous year. Complaints were mostly about mobile service faults and issues related to smartphone use.

Vodafone CEO Vittorio Colao said the operator had fixed the network problem in Australia, but noted, "We're not pleased until the customer metrics are right, and that will take a couple more quarters."

In Australia, Vodafone is in the process of swapping out its 2G and 3G radio access network with equipment from Huawei Technologies Co. Ltd. as well as rolling out new 3G coverage in 850MHz spectrum.

— Michelle Donegan, European Editor, Light Reading Mobile

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