Vodafone customers voting with their feet

OPTUS and Telstra have divvied up the gains from customers leaving Vodafone Hutchison Australia, with both carriers recording strong growth in post-paid mobile customers in the March quarter.

Optus said yesterday it gained 151,000 post-paid mobile customers in the three months ended March. The result was steady on the last quarter and slightly higher than the same period a year ago. The new figures were released ahead of today's full-year financial report from Optus parent Singapore Telecommunications.

Optus added 570,000 mobile customers in the year ended March, up 7 per cent on last year. But Telstra, after an aggressive pricing campaign, continues to lead the pack, signing up 1.2 million new mobile subscribers in the nine months ended March.

The gains by Optus and Telstra have come at the expense of VHA, especially in the March quarter. Goldman Sachs analyst Christian Guerra said VHA's net loss of 150,000 mobile customers in the quarter was worse than expected. VHA added 142,000 mobile customers in the December half but it is thought customers began deserting the carrier as their plans expired because of poor network performance which has received widespread coverage.

In the lucrative post-paid segment, VHA lost 224,000 mobile customers in the March quarter but added 94,000 pre-paid subscribers which means it suffered a net loss of 130,000.

In a bid to stem defections, VHA began further subsidising the cost of handsets on post-paid plans. In contrast, Telstra and Optus have both reduced subsidies on handsets in a bid to manage margins. "The flood of subscribers deserting VHA is resulting in an easing in competitive intensity," Mr Guerra noted.

In April, as part of a new suite of mobile plans, Telstra introduced a plan priced at $59 a month to rival Optus's highly successful product.

Optus also recorded a healthy rise in customers' use of wireless broadband products in the quarter.

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