The six month-old joint venture between Vodafone and Liberty Global in the Netherlands has made an unspectacular start to life, its first set of half-year financials have revealed.
Revenues declined 2.9 percent to €2.01 billion in the six months to June compared to the equivalent period last year before the merger.
Sales of fixed services to businesses jumped 4.5 percent in the period but the only bright spot accounts for just €176.5 million of total revenues.
Fixed services to retail customers, the JV’s major revenue driver, brought in €1.05 billion, but this was a fall of one percent.
It is in mobile where the company is struggling, however.
Mobile revenues from retail subscribers fell 5.9 percent to €447 million, while those from business customers dropped 8.8 percent to €315 million.
The company has sold 5.05 million mobile SIM cards, down from 5.24 million 12 months ago.
Net SIM losses across both postpay and prepay were over 52,000 in Q1 and over 23,000 in Q2.
Further, the ARPU of postpay customers, who account for 80 percent of the JV’s total mobile subscriber base, has fallen from €29 to €26.
The company cited a range of factors for the poor performance of mobile, including roaming regulation and competition, particularly in the business market.
Nevertheless, the company talked up the launch of a converged offer in April, which has been taken by 633,000 households and includes 872,000 mobile SIMs.
The offer includes a mobile data allowance that is double the usual, an “extra premium” TV package and an internet security package.
The company said 64 percent of fixed customers take three services, while 17 percent take two.
"While competition in the mobile market remains intense, we are making good operational progress, the merger integration process is going well and we are on track to become a fully converged player,” CEO Jeroen Hoencamp said.
“Looking ahead, we expect mobile termination rate cuts and roaming regulation, combined with an ongoing drag in B2B mobile, to weigh on our mobile revenue.
“Despite these headwinds and higher expected integration costs resulting from the acceleration of our restructuring efforts during the second half of the year, we are confident that we can achieve our full-year OCF guidance and deliver attractive cash returns for our shareholders."