Vodafone Hutchison Australia 2016 Performance Media and Analyst Briefing A solid performance in 2016
Customer Underlying EBITDA #1 network in numbers up revenue up major cities
Roaming Growth in EBU NPS up +13 points Cash flow revenue up positive Drivers of performance – network
610 #1 network in 598 major cities 589 MAJOR CITIES BREAKDOWN (Drive & walk tests)
COMMSDAY 2016 Vodafone Telstra Optus
* VHA ranked as the top-performing network in Australia’s cities with a population over 100,000 for aggregate voice and data performance in the independent CommsDay P3 network benchmark tests released in December 2016. Drivers of performance – network improvement
800 812 Vodafone Telstra 700 720 Optus
600 Vodafone increased by +57% 2014 – 2016
500 516
2014 2015 2016
* Source: P3 Comms Day Mobile Benchmark Report 2016 Drivers of performance – products which offer value
Points mode ON. 2 months $5 Roaming ON. access fees on the HTC U Ultra 1 free Earn up to ,500 antas Points in store and roam to over 50 countries for 5 e tra a day. 8GB 88/mth 80 y ix Red Data plan + 8 phone.
Over 2 months. Total min cost 2112. Additional data in O added at 10/GB ( 0.10/MB).
Until 31.01.1 2
UltraIt s all about U. Vodafone Vodafone Power to you
Power to you Offers end 0 .05.1 . For use in O . Available on antas Red plans. 5 Roaming ma 0 days. To find out where we have coverage, visit vodafone.com.au.coverage. The nitty gritty For personal use by approved customers only. Inclusions e pire after 1 month. Plan e cludes Premium Services, 1223 and 1225 directory services, 123 Ask-Us-Anything, International Roaming, content purchases, Call Screen and charges for additional data and additional standard international calls. Min monthly spend is 0 plus handset payments. Early exit fee 0 months left on contract plus any handset payments. Services sub ect to device capabilities, network limitations and customer location. Offer not transferrable or redeemable for cash and sub ect to change. Business customers must have an AB /AC . Available to approved new and upgrading customers (e cludes rate plan change) who sign-up The nitty gritty 1 Available to antas Fre uent Flyer ( FF’) members who sign-up or upgrading to an Eligible antas Red Plan listed at vodafone.com.au/ antas. Min month spend and early e it fees apply. antas Points are sub ect to to a Vodafone 0, 100 or 120 MyMi Red Global or MyMi Red Data 2 month handset plan or a 0 Red Data 2 month handset plan, with a HTC U-Ultra phone. E cludes Business Grow and Business Fle . Free access fees available for first the FF Terms and Conditions found at antas.com/terms. FF membership name and Vodafone account holder name must match. FF membership number must be provided to Vodafone in the applicable online form when signing two months only and applied as an account credit. Forfeited if you cancel. For months 1-2, min monthly spend is any applicable device costs. From month 3 onward, min monthly spend is 0, 0, 100, 120 ( 0, 0, 100 and 120 plans up or within 60 days of sign-up or points will be forfeited. Points will be credited within 30 days of form submission. Points will be earned once only during term. If plan is cancelled pursuant to the Vodafone etwork Guarantee, members respectively) (Undiscounted Min Monthly Spend) plus applicable handset costs. Early E it Fee 50 of Undiscounted Min monthly Spend months remaining on contact plus applicable handset costs. ot for commercial or resale purposes, will no longer ualify for any points. Points are not e changeable, transferrable or redeemable for cash. Full terms at vodafone.com.au/ antas-terms. 2 Available to eligible customers for use in selected countries. 5 daily charge is transferable or redeemable for cash. Services sub ect to device capabilities, network limitations and customer location. Sub ect to change. V0 3 03.1 in addition to minimum monthly spend. 5 daily charge waived when roaming in ew ealand until 31.1.1 (unless e tended). Customers who oin or change to an eligible Plan will automatically be opted into 5 Roaming. All other eligible customers must choose to opt-in. E cludes Vodafone to Vodafone minutes for non-Red Plan customers. May be used for a ma 0 days in any calendar year. Full details at vodafone.com.au/roaming. Opt-out at any time, visit MyVodafone.com.au/ or call 1555. All roaming services sub ect to network availability. 5 Roaming ends 31.01.1 , unless e tended. V036 0 03.16 Drivers of performance – customer first culture Calls for greater choice for regional Australia
NT $37m Qld $26m WA $123m Total subsidies SA $34m $1.9 billion NSW (including Fed Govt subsidies/USO) $23m
Vic $110m Tas $350K Calls for greater choice for regional Australia
The lack of transparency and The rollout of the national broadband The TUSO is past accountability makes the continuation network and increasing consumer of current arrangements difficult to demand for data is leading to the rapidly its use-by date. justify from the point of view of those declining relevance of the Universal (Productivity Commission, December 2016) who contribute to its funding. Service Obligation. (Productivity Commission, December 2016) (Regional Telecommunications Independent Review Committee, October 2015) Natural monopoly & subsidies driving vicious cycle
Government money to improve Natural monopoly coverage coverage ultimately subsidises further extended and Telstra’s dominance entrenched
Spillover effects reduce competition and choice across Captive consumers and an even greater proportion VICIOUS market power of the mobile market CYCLE
Additional revenue fuels Ability to extract additional advantage including revenue and sustain a Telstra’s advertising of substantial premium of its network $1.4 billion a year Domestic roaming is the best solution
A natural monopoly exists in many rural and remote areas
Telstra’s mobile monopoly has been entrenched by subsidies
International experience demonstrates domestic roaming promotes competition and investment
No international evidence to support claims domestic roaming would negatively impact investment
There would be no “free ride”
Two thirds* of regional Australians support domestic roaming
*Empirica Research, January 2016 Using mobile for good
75,000 downloads
50% of the project data has been crunched to date HALF the time compared to Garvan’s supercomputer 2016 Financial performance
Revenue* Network customer base Customer ARPU* $3,211 million 5.56 million $43.77 up 5.7% up 2.3% up 3.6%
EBITDA OFCF/FCF Improved loss position $912.1 million down 43.8% up 12.2%
* Excluding incoming revenue Revenue ($m)
3,651
3,495 3500 3,345 5.7% YoY
3000 3,211.3 3,039.1 2,923.1 Total revenue
2500 Excluding incoming revenue
2014 2015 2016 EBITDA ($m)
1000
900 912.1 12.2% YoY 800 812.8 771.2
700
2014 2015 2016 Total network customers (‘000)
6000
5500 5,562 5,437 125,000 5,302 customers, 5000 2.3% YoY
2014 2015 2016 Post-paid (‘000)
3400 3.2% YoY 3300 3,354
3200 3,249
3100 3,140 ARPU
3000
2014 2015 2016 Revenue 2017 Outlook
Continued significant network Launch fixed Connect more investment broadband services Australians
Continue Tailored products Focus on seamless, regulatory agenda that put customers simple customer to drive competition in control experience and choice for all Australians Questions?