Vodafone to pump billions into beefing up network

VODAFONE Hutchison Australia has joined the investment race in the mobile sector, saying it will spend $2 billion this year to beef up its network.

While the telco has not provided a breakdown on how the capital will be spent, a significant portion will be used to upgrade existing infrastructure rather than extend the footprint of the network. The investment plans come on the back of rival Optus committing to spend $1 billion to improve its mobile network in regional Australia by the end of next June.

Telstra meanwhile continues to forge ahead with its multibillion-dollar network upgrade program while TPG Telecom has unveiled plans to build Australia’s fourth mobile network.

Vodafone chief financial officer James Marsh said the strength of the telco’s network was being broadly recognised by the market and continued to help Vodafone post better numbers.

Its results for the six months to June, released yesterday, revealed Vodafone’s customer base grew by almost 190,000 customers to 5.7 million in the period, with solid upticks in revenue and earnings.

Total revenue for the period jumped 3 per cent year-onyear to $1.6 billion, while earnings before interest, tax, depreciation and amortisation increased 15.9

$477.3 million.

But the upward trend could not lift Vodafone into the black. It posted a net loss of $81.5 million – still a significant improvement on $164 million of red ink a year earlier.

“Our obsession isn’t customer numbers, we are looking to grow the business sustainably per cent to both on revenue and returns,” Mr Marsh said.

Vodafone, a joint venture between Britain’s Vodafone Group and Hong Kong-based Hutchison Whampoa, said average revenue was down 5.7 per cent. Hutchison Telecommunications’ Australian-listed securities closed up 4.9 per cent, or 0.3¢, yesterday at 6.4¢.