*VOD adding 10 million customers per quarter
Vodafone AirTouch Report First Joint Subscriber Base
By Christine Harper at Bloomberg News
07 July 1999
Vodafone AirTouch Plc, the world's largest wireless phone
company, said it added more than 2.3 million customers in the
second quarter, fueled by international growth and more
customers buying prepaid packages.
The company, created by Vodafone Group Plc's $73.7 billion
takeover of AirTouch Communications Inc., also said that for
the first time, all of its growth in the U.K. came from prepaid
customers and that it lost contract customers.
Vodafone AirTouch, reporting together for the first time after
completing its linkup last week, has a worldwide customer
base of almost 28 million, excluding paging customers, in 23
countries. Analysts, who said it was difficult to make forecasts
for the new company, noted that overall growth was
impressive.
"Based on this quarter, they're adding nearly 10 million
customers a year, and the Christmas season will add much
more," said Tressan MacCarthy, an analyst at Credit Lyonnais
Securities Europe who rates the shares "buy." "Name me any
business in the world that's adding customers at that rate."
The company's shares were up 14 pence, or 1%, to 1,351p
($21.04).
At the end of June, the company said it had 6.16 million U.K.
customers, 10.34 million customers in Europe, the Middle East
and Africa, 8.95 million in the U.S. and 2.15 million in the
Asia-Pacific region. The figures in Europe exclude its stake in
Germany's E-Plus network, which the company plans to sell.
"The unprecedented growth in mobile telephony that we have
seen around the world this year has continued throughout the
last quarter in all our major markets," Chief Executive Chris
Gent said in a statement.
There are more than 200 million phone subscribers worldwide,
according to research group International Data Corp., a figure
that's set to grow to 550.3 million by 2002.
In the U.K., Vodafone AirTouch said it added 587,000
customers in the second quarter, compared with MacCarthy's
estimate of 600,000. The gains all came from prepaid packages,
which rose by more than 654,000 in the quarter.
The company lost 67,000 U.K. contract customers during the
April to June period because of mass disconnections by two
of its service providers.
Service providers act as a liaison between the Vodafone
network and customers and often hold on to contracts after
losing customers in the hope of replacing them, Vodafone
spokesman Mike Caldwell said. Vodafone opted to disconnect
all of the unused contracts at two service providers, which it
declined to name, after deciding it wouldn't find new
customers for them, he said.
MacCarthy, who said she was expecting only 50,000
disconnections from one service provider, said she doesn't
expect the problem to happen again.
"I would be surprised if we see the contract base decline
again, but I'm not saying we'll see that contract base boom,"
she said.
She also said the lack of contract customer growth doesn't
concern her, as she would rather see Vodafone sell prepaid
packages, which are less expensive to sell than contracts, to
low- spending customers. She added that Vodafone already
dominates the market for corporate and high-spending
customers. [Very, very bullish for Globalstar...]
Last week BT Cellnet Ltd., the No. 2 U.K. operator, said it
added 501,000 new U.K. subscribers in the second quarter.
Orange Plc, the third-biggest network operator, gained 430,000
customers, while One 2 One Ltd., the smallest operator, added
401,000.
Orange said today that it won 50% of the U.K.'s new contract
subscribers during the second quarter, helped by a new plan
that offers customers 50 minutes of off-peak calls for one
penny a minute. It also unveiled that its U.K. customer base
on July 6 reached 2 million contract customers and just under
1 million pre-paid customers.
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