Vodacom adds almost 500,000 new clients in SA as prices drop

Vodacom.
Vodacom.

Vodacom has added almost half a million users in South Africa in three months, thanks in part to a promotional campaign.

In a trading update for the quarter to end-December 2019, the mobile phone giant said it added 484,000 customers in South Africa, and 1.7 million international customers during the period. It now has 117 million customers across the group.

Shameel Joosub, Vodacom Group CEO, said in a statement that the growth in South Africa was helped by its summer campaign, which delivered 334 million free rewards to 17 million customers.

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Joosub said its ongoing "pricing transformation strategy" resulted in the network operator’s data prices falling by approximately 50% since March 2016.

Last year, new regulations came into effect which required mobile operators to prevent automatic out-of-bundle data usage, roll over unused data and to allow their customers to data transfer data to others. Vodacom also announced substantial cuts in out-of-bundle tariffs.

Vodacom said its data customers increased by 12.5% to 22.9 million and unique bundle data users to 14 million. Overall data usage increased by 63.2% as data bundles sold rose by 20%. But despite adding 450,000 more prepaid customers, its mobile prepaid customer revenue declined by 1.8%.

The group's total revenue rose by 6.6% to R23.6 billion, with South Africa growing by almost 6% to R18.2bn, while its international businesses expanded by 9% to R5.8bn.

Vodacom’s services division include digital offering digital in video, music, sports and gaming as well as VodaPay, which enables direct airtime purchase and bill payments. The group now has 2-million customers on its video platform. Its fibre offering has been rolled out to 50,000 homes.

Joosub said Vodacom expects to be able to launch5G services in South Africa later in 2020, without giving an exact date. "This is possible thanks to a recent roaming agreement with Liquid Telecom, as 5G spectrum is largely unassigned in South Africa."

After an initial rally following the release of the update, Vodacom's share price pared gains and was flat by mid-morning.

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