Vodacom increases revenue on strong customer growth, cheap data deals

vodacom
vodacom

Mobile services operator Vodacom on Tuesday said it increased group data revenue by 9.6% in the quarter to end-June 2018 on the back of increased customer numbers.

The group said in a trade update that it added 2.5 million customers - 1.5 million in South Africa and 1.0 million in its International operations - to reach 76.5 million. This excludes Safricom customers.

Apart from South Africa, Vodacom has operations in Tanzania, the DRC, Mozambique and Lesotho. Through Vodacom Business Africa, the group offers business managed services to enterprises in 30 countries across the continent.

Locally, Vodacom grew service revenue by 4.9%, supported by customer growth of 9.5% to 43.1 million customers, this "despite the dire economic environment in South Africa".

Vodacom CEO Shameel Joosub said this growth was driven by the company's 'Big Data'-led innovations, which contributed to robust demand for personalised bundles.

According to the trade update Vodacom sold over 600 million bundles in the quarter under review, resulting in an effective price reduction of 10% on voice minutes and 17% for data megabytes.

"This is evidence of our commitment to lowering the cost to communicate," said Joosub.

Other cost cutting initiatives for consumers include the new Vodacom Ticket, which allows customers to save up to 50% on data for social media, video, music and gaming, he added.

Joosub said data revenue contributed more than 44% to service revenue.

Group service revenue, excluding currency translation effects, grew 4.2% compared to the previous quarter, with South Africa service revenue climbing 4.9% to R13.8bn, and International service revenue increasing 4.1%to R4.3bn.

Joosub ascribed the growth in International service revenue largely to M-Pesa and data adoption. "M-Pesa continues to grow strongly and we now have 12.7 million customers, (excluding Safaricom) using this service," he said.

M-Pesa revenue growth, excluding currency translation effects, was up 18.1% compared to the previous quarter.

Looking ahead, Joosub said Vodacom expects the implementation of the ICASA End-user Subscriber Charter Regulations, in relation to out-of-bundle usage, to have a modest impact on data revenue growth.

"We expect this to be mitigated in the short term by continued uptake of data bundles and strong elasticity in demand for these services."

Vodacom shares were trading 1.23% lower at R127.28 by 09:05 on the JSE.

* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER
We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For only R75 per month, you have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today.
Subscribe to News24
ZAR/USD
16.37
(-0.40)
ZAR/GBP
21.52
(-0.33)
ZAR/EUR
19.41
(-0.26)
ZAR/AUD
11.62
(-0.11)
ZAR/JPY
0.16
(-0.33)
Gold
1913.63
(-0.40)
Silver
24.77
(-0.66)
Platinum
885.00
(+0.20)
Brent Crude
42.06
(-3.35)
Palladium
2398.00
(+1.07)
All Share
55345.49
(+0.13)
Top 40
50905.12
(+0.11)
Financial 15
10138.60
(+1.83)
Industrial 25
74577.70
(-1.31)
Resource 10
54447.94
(+1.23)
All JSE data delayed by at least 15 minutes morningstar logo
Company Snapshot
Voting Booth
Please select an option Oops! Something went wrong, please try again later.
Results
Yes, and I've gotten it.
27% - 41 votes
No, I did not.
48% - 74 votes
My landlord refused
25% - 39 votes
Vote