Vodacom increases revenue on strong customer growth, cheap data deals

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 R13.8-billion, and International service revenue increasing 4.1%to R4.3-billion.

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. — Fin24

Subscribe to the M&G

These are unprecedented times, and the role of media to tell and record the story of South Africa as it develops is more important than ever.

The Mail & Guardian is a proud news publisher with roots stretching back 35 years, and we’ve survived right from day one thanks to the support of readers who value fiercely independent journalism that is beholden to no-one. To help us continue for another 35 future years with the same proud values, please consider taking out a subscription.

Related stories

Third time lucky: Will Mozambique’s peace deal last?

It’s been a year since Frelimo and Renamo signed the Maputo Accord. This time, the peace might just hold

Caring for students goes beyond the teaching project

The Covid-19 pandemic gives universities an opportunity to find new ways of ensuring the health and well-being of students

Mozambique needs an intervention – but SADC must not rush in blindly

Military intervention in Cabo Delgado must be aimed at protecting people first

The SADC will regret its approach to Mozambique’s insurgence

The SADC has been lackadaisical in its response to the insurgency in Mozambique and in so doing, is putting several other southern African countries at risk

Leading others in a time of crisis

Like other sectors, higher education should continue to respond optimally to the coronavirus and map out a new path

The pandemic has shifted patterns of conflict in Africa

Although the overall rate of conflict has remained steady in Africa during the past 10 weeks of the pandemic, the nature of this is changing in subtle but significant ways

Sekhukhune’s five-year battle for water back in court

The residents of five villages are calling for the district municipal manager to be arrested

Fees free fall, independent schools close

Parents have lost their jobs or had salaries cut; without state help the schools just can’t survive

Vaccine trial results due in December

If successful, it will then have to be manufactured and distributed

White men still rule and earn more

Women and black people occupy only a few seats at the JSE table, the latest PwC report has found

press releases

Loading latest Press Releases…

The best local and international journalism

handpicked and in your inbox every weekday