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VHA looks to NBN trials for network improvements

VHA looks to NBN trials for network improvements

Plans to avoid network challenges, customer churn of early 2011

Vodafone Hutchison Australia (VHA) has announced plans to join mainland trials of the National Broadband Network (NBN) in Armidale, NSW to improve the performance of the network.

In a presentation to Hutchison Telecommunications Australia's (ASX:HTA) annual general meeting on Wednesday, VHA chief executive, Nigel Dews, said the trials would help the telco develop and test the use of the 121 assigned NBN points of interconnect as backhaul for the telco's mobile services.

"If successful it could mean more mobile services, to more Australians, at more competitive prices," he said.

Armidale became the first of five mainland sites to receive operational NBN access, with some of the 2900 premises earmarked for fibre access reporting a soft-launch of the $36 billion network. At least four internet service providers have been used to test the network to some customers, ahead of a total of 12 providers coming online to provide services at each of the five mainland sites by June this year.

The general meeting was held as the telecommunications industry ombudsman reported a near-doubling of complaints against Vodafone in the first quarter of the year, compared to the last three months of 2010.

Turning to the network and service issues, Dews admitted that customer churn away from the company had impacted sales. The exact number of customers who had left the network was not released but details obtained by Computerworld Australia in February indicated churn rates had increased two per cent overall in the 12-month period to 31 December 2010.

There was also a considerable spike in churn rates throughout December 2010 and January 2011 as a result of “operational difficulties” in the network.

“These challenges, combined with the intensely competitive market, have impacted our growth, although our postpaid base has remained stable in the first quarter of 2011,” Dews said.

“To address the network challenges, we have accelerated plans to upgrade the entire, existing Vodafone network and build new sites to improve coverage, data capacity and speed. By the end of 2011, total spend on the network since the merger will exceed $1 billion. This will have a significant, positive impact on customer experience.”

Despite network issues and increased churn, the network as a whole added 681,000 customers in 2010, closing the year with 7.6 million customers. Postpaid handsets grew 11.5 per cent year on year.

The company posted a full year profit of $73.4 million in December 2010, following an underlying loss of $119.6 million in 2009.

VHA achieved double-digit service revenue growth, at just over 16.8 per cent. This brought its total service revenue to $4.4 billion with earnings before interest, tax, depreciation and amortisation (EBITDA) of $952 million.

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Tags Vodafonefinancial resultsNational Broadband Network (NBN)Vodafone Hutchison Australia (VHA)Nigel DewsArmidale

More about etworkHutchisonHutchison Telecommunications (Aust)VHAVodafone

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