Demand for data buoys Vodacom

Vodacom’s revenue grew 5.3% in the six months ended September, helped by an increase of active SA customers and a boost in data revenue.

Johannesburg - Vodacom, South Africa’s biggest mobile operator by subscribers, yesterday reported that its revenue grew 5.3 percent in the six months ended September led by an increase of active South African customers and a boost in data revenue.

The group increased its subscribers by 1.5 million in South Africa for the period under review, increasing its customer base to 35.7 million in the country.

Shameel Joosub, Vodacom’s chief executive, said the high demand for data services from the South Africa market was a key contributor to the company’s revenue growth.

Momentum

“We have seen greater momentum in bundle usage growth, with 9.3 million customers now buying more than 223 million data bundles,” Joosub said.

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The group’s data revenue from its South African operations increased by 19.5 percent to R9.8 billion. Data revenue from the company’s international markets grew by 15.5 percent to R2.1bn. The company said data revenue contributed 34.5 percent of the group’s service revenue.

Michael Treherne, a portfolio manager at Vestact, said Vodacom’s results indicated a move to data being the main driver of revenues for mobile companies.

“Mobile companies are going to be more data providers than voice providers, if you are buying stock now you are essentially buying it to connect people via the internet as opposed to voice calls,” he said.

Revenue for the six months increased by 5.3 percent to R40bn, while its operating profit went up by 5.4 percent to R10.7bn. The company said its headline earnings per share remained flat at 440 cents. It attributed this to tax adjustment in Tanzania and foreign currency impacts.

Despite making inroads in its customer base in its home market, it has suffered losses in its international market. Active customers decreased by 11 percent to 27.9 million, due to disconnections it experienced during the second half of the prior year.

Encouraged

Joosub said the company’s international operations were negatively impacted by customer registration requirements but was encouraged by growth experienced in its M-Pesa operations.

“We witnessed encouraging net additions to our active customer base in the second quarter, while M-Pesa revenue achieved stellar growth of 36.8 percent, there are now 10.9 million customers using M-Pesa in our international operations.”

He said the company was monitoring the deteriorating macroeconomic conditions in both the DRC and Mozambique.

Joosub said 8.9 percent rise in enterprise growth was pleasing as the company had won significant contracts in both the corporate and public sector.

“A major highlight includes securing national and provincial government departments’ mobile voice and data communications contract for a period of four years.”

The company said it had spent R5.7bn in capital expenditure to improve its networks in the first half of the year - R4bn of which was spent in its South African networks.

Last month, the cabinet approved the Department of Telecoms' Integrated information and Communication Policy White Paper, which directs mobile networks to collaborate to roll-out network infrastructure.

Vodacom said the White Paper would fail to make broadband accessible and affordable to all.

“The White Paper proposes a telecommunications ecosystem that is untested and unproven anywhere in the world,” the company said.

Vodacom shares closed 2.17 percent lower on the JSE yesterday at R140.

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