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Vodafone's Irish customers cut spend by 11pc in tough market

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A pedestrian uses a mobile device as balloons sit beneath a sign outside a Vodafone store

A pedestrian uses a mobile device as balloons sit beneath a sign outside a Vodafone store

A pedestrian uses a mobile device as balloons sit beneath a sign outside a Vodafone store

THE average revenue from Vodafone's Irish customers fell by more than 11pc over the last year, marking another tough year for mobile industry revenues.

The operator, which remains the largest in Ireland with a market share of around 40pc, also saw its European revenues fall by 5pc. The company said its falling revenues were the result of fierce competition, tighter regulatory controls and shifts in customer usage patterns.

Vodafone's average revenue per user (ARPU) fell to €28, down from €31.40 a year ago. The fall mirrors an overall market decline in Irish monthly mobile revenues, with the average Irish ARPU falling 11pc from €29.30 to €26.20 in the year up to October 2013.

However, the operator saw its customer numbers rise by 9,000 to 2.15 million. It also said the number of its customers using mobile internet services rose 42pc in the last year and now stands at three in four.

The proportion of prepaid customers on Vodafone fell 2pc in the last year, mirroring the overall shift from prepaid to contract customers in the Irish mobile industry as more people move to high-end smartphones with large upfront costs on prepaid plans.

Vodafone is currently rolling out its 4G network through the country, which it hopes can bolster revenues in the Irish market. It says that it now has 4G connectivity across six cities and 31 towns nationwide. 4G allows users to access online services at much greater speeds than 3G.

Vodafone is also understood to be considering new fixed line broadband rollout plans.

The last available accounts for Vodafone show that it made a profit of €115m in the year to mid-2012.The results come against the backdrop of consolidation in the Irish mobile telecoms industry.

Next month, the European Commission is set to rule on a proposed €700m acquisition of O2 Ireland by 3 Ireland. If successful, 3 Ireland would gain a 38pc market share, just two points behind Vodafone.

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However, the deal must overcome objections from the European Commission on fears of negative competitive consequences for rival Irish operators and mobile customers. Among the fears the commission is believed to have are an over-concentration of valuable mobile spectrum in the hands of the new, larger 3 Ireland.

The most recent figures from Ireland's telecoms regulator showed a total market of 5.6 million active mobile connections. However, traditional sources of revenue for Irish operators are becoming squeezed by changing customer habits and regulatory developments.

The volume of SMS text messaging is falling by over 10pc per year in Ireland, while roaming charges are falling.

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