Vodacom benefits from increased data demand during lockdown

Vodacom saw data traffic increase during the lockdown.
Vodacom saw data traffic increase during the lockdown.
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Vodacom’s latest financials show that the mobile network provider continued to enjoy significant growth in demand for its voice and data services, even as more people went back to work in lockdown level 3.

Vodacom recorded a 40% surge in data traffic when the lockdown began in SA, partly because of its reduced data prices but more so because most people moved to working from home while demand for home entertainment shot up.

But even as fibre network operators started operating at full capacity under lockdown level 4 and some people returned to work, the company almost doubled its its data traffic, recording a 97.7% increase for the quarter ended on 30 June, it said in a trading update released on Thursday.

The group said 13.2 million of its subscribers are now using 4G. This, together with strong demand for voice and financial services in South Africa, helped the group record a 5.6% increase in revenue for the quarter ended June 30. Services revenue went up 7.6%.

Strong growth in South Africa was largely responsible for an increase in revenue, as Vodacom's international operations recorded a 6.2% decline in group revenue, while service revenue shrank by 5.3% on a normalised basis. On nominal basis, however, international business service revenue grew by 10.7% benefiting from the rand's devaluation. 

Vodacom said its international operations were negatively impacted by lower economic activity from the effects of Covid-19.

The company is currently embroiled in a "Please Call Me" court case with inventor Nkosana Makate over rights and remuneration for his creation of the product almost 20 years ago. On July 22, Vodacom appealed the court’s decision in favour of Makate.

Vodacom’s share price increased by 3.56% in early trade. 

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