One of Vodafone Australia's owners has warned that the nation's No.3 mobile carrier is likely to post further losses, fresh on the heels of posting nearly $900 million in losses last year.
Hutchison Telecommunications Australia, which has a 50 per cent stake in Vodafone Hutchison Australia (VHA), said the wireless carrier had made inroads into stabilising its customer base and financial performance.
However, Hutchison chairman Canning Fok said he still expected Vodafone's balance sheet to be in the red this year.
BusinessDay revealed on Thursday that Vodafone Australia's parents were forced to pay $173 million into a lending facility after the Australian venture came close to breaching covenants on a $3 billion loan this year.
Vodafone's talks with its bankers continue as its latest accounts show that VHA recorded an $899 million loss for the previous calendar year. This had widened from a loss of $420 million in 2011.
"Although continuing losses are anticipated in 2013, HTAL [Hutchison Telecom Australia] expects improvements in VHA's performance through the year and into 2014," Mr Fok told investors at the telco's annual meeting.
VHA is a joint venture between Vodafone and Hutchison Telecom, which is owned by the richest man in Asia, Li Ka-shing. Hutchison lost $408.8 million last year but earned $19 million in interest from its loans to Vodafone Australia.
Mr Fok reiterated his support for the loss-making venture at the company's annual meeting on Thursday. "It is important to remind you that Hutchison, together with its joint shareholder, Vodafone, continues to support VHA and we have fully endorsed the strategy to turn VHA's business around," he said.
Vodafone Australia chief executive Bill Morrow, who has a reputation for turning around distressed businesses, is fighting a battle to win back disgruntled customers owing to the well-documented network failure issues.
Mr Fok said regaining this trust was the key focus of VHA and continued investment was critical.
Vodafone is due to launch its 4G network next month.