News: Complaints and churn soared after a billing system migration issues.
Mobile giant Vodafone has blamed high Q415 customer churn in its mobile division on a troubled IT migration project.
Mobile service revenue declined 0.7 percent in the UK and contract customer growth slowed in the quarter which Vodafone said was impacted by higher churn rates, blaming its billing system migration.
In its financial statement Vodafone said: "Service revenue declined 0.3 percent for the year, with improving trends in fixed line offset by a slowdown in mobile, reflecting operational challenges following a billing system migration."
The dent in Vodafone’s performance been driven by issues resulting from a migration of its billing system which was intended to simplify the operation of customer accounts and open up services such as ‘click and collect’.
Vodafone however said that the complex migration had created some unspecified "problems".
According to the company, now that the migration has been completed the customer experience should return to normal.
Ofcom opened an ‘own-initiative‘ investigation into Vodafone’s billing problems, later choosing not to take enforcement action after concluding that Vodafone had complied with General Condition 11.1. This requires communications providers to ensure that customers’ bills represent the true extent of the service actually provided.
Ofcom revealed in its most recent quarterly telco complaints report that complaints about Vodafone’s mobile services veered sharply away from its competitors.
They rose from 15 per 100,000 in Q4 2014, to 32 per 100,000 by the same time the following year. The more than doubling took place between Q2, where the figure was 14 per 100,000, and Q4 2015.
There were encouraging signs elsewhere in Vodafone’s results, with organic service revenue growth of 2.5 percent in the quarter. Operating profit for the year was £1.377 billion.
Kester Mann, Principal Analyst at CCS Insight cited the company’s good momentum in enterprise and said that Vodafone’s return to revenue growth offered "further evidence of the European sector’s emergence from a prolonged period of brutal price competition and weak economic growth."
The company has launched broadband services in the UK, seeking to compete with players such as BT which can now offer multiple services including broadband, fixed telephony, pay-TV and mobile.