Vodafone announce 5G sites will turn on as it hopes to reverse a drop in customers who are making them less money

Customers abandoned the telco as it languished in legal limbo over a merger with TPG. It’s hoping one thing can help stem the bleeding.

You’ll soon have a third choice to connect to new superfast 5G mobile networks after Vodafone announced it would switch on the first of its sites soon.

It comes after the Federal Court announced it would let Vodafone and TPG merge to create a new, more powerful telco to compete with Telstra and Optus.

Both of those networks have already begun their network rollouts and have turned on 5G in a number of places around Australia.

Vodafone announced it would build a 5G network at the end of last year.

Now that the court has finally delivered its decision, the company is pushing forward.

It will be hoping the new network is enough to turn things around, after announcing its average revenue per user (ARPU) on its mobile network dropped almost 5 per cent.

ARPU is perhaps the best indicator of a telco’s financial health, so it’s not a good sign for Vodafone that the figure dropped from $35.05 in 2018 to $33.35 last year.

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Vodafone announced Wednesday it would turn on its first 5G sites within weeks. Picture: Justin Tallis/AFP

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Not only is the average Vodafone customer bringing in less money, there’s also fewer customers.

Vodafone has gone from having just over 6 million customers on its network to 5.744 million in the space of a year, predominantly due to losing prepaid customers.

The company also doesn’t seem too interested in trying to get those customers back.

Vodafone acting CFO Sean Crowley said it wasn’t the time to aggressively chase customers.

“Facing an uncertain environment, we made a strategic decision to focus on maintaining our postpaid mobile base rather than pursuing aggressive customer growth,” Mr Crowley said.

The “uncertain environment” is likely a mention to the 18 month limbo the company faced after announcing it wanted to merge with TPG.

The merger was blocked by the Australian Competition and Consumer Commission (ACCC) but that decision was overturned in the Federal Court earlier this month.

Vodafone CEO Inaki Berroeta is confident a merger with TPG will allow Vodafone to compete better with Telstra and Optus.

Vodafone Acting CFO Sean Crowley said the company had to retain the customers it already had rather than chase new ones.

Vodafone CEO Iñaki Berroeta said the company was moving forward from that process and the merger would help accelerate the rollout of 5G.

He said the network will turn on its first 5G sites “within weeks”.

“These will be the first of over 650 5G sites in progress. Several thousand sites are to be built over the coming years.”

Mr Berroeta added the merger between TPG and Vodafone will create a company that “will have a strong balance sheet, significantly improved spectrum and transmission assets, and increased cross-selling opportunities”.

He said this will allow it to compete better and combat last year’s downturn.

While the new company will have more spectrum (the radio frequencies that carry our calls, messages and data), it could face another challenge from the consumer watchdog in acquiring more.

The ACCC announced on Wednesday it’s seeking feedback on competition issues ahead of next year’s auction for the high-frequency spectrum that will facilitate the much faster speeds of 5G.

5G sites are being installed all over the country, but the ACCC has new concerns about who can transmit data on them.

The Commission is in charge of advising Communications Minister Paul Fletcher on whether limits should be placed on the amount of spectrum any one entity can acquire and what those limits should be.

ACCC Commissioner Cristina Cifuentes said the auction needs to get the balance right.

“It’s important that this spectrum is allocated in an economically efficient way, to support the deployment of cutting-edge 5G technologies. But it’s also important to promote competition among spectrum users, for the long-term benefit of businesses and consumers,” she said.

Ms Cifuentes is also an associate member of the Australian Communications and Media Authority (ACMA), which manages spectrum allocation.

The ACCC wants to know what the likely demand for spectrum will be, who wants it, how they plan to use it, and where in order to predict any competition issues that may arise.

The ACCC is expected to give its advice to the Minister by mid-May.