Foreign Vodacom units ring up gains

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BR Vodacom 868[1] Independent Newspapers Vodacom chief executive Shameel Joosub says data services continue to be a key driver of growth. Photo: Simphiwe Mbokazi.

Johannesburg - Vodacom’s revenue for the quarter to June increased 4.3 percent year on year as customers outside its home market increased data usage, the cellular operator said yesterday.

According to the company’s first-quarter report, revenue rose to R18.3 billion, driven mainly by the international businesses. Vodacom operates in Mozambique, Tanzania, Lesotho and the Democratic Republic of Congo.

However, the picture was not as bright in South Africa, where revenue grew by only 1.7 percent to R14.8bn.

In addition, local service revenue declined 2 percent due to price cuts initiated by government regulators, Laksmi Narayanan, the programme manager for information and communication technology businesses at Frost & Sullivan Africa, said.

Group data revenue increased 23.2 percent to R3.6bn as the number of active data customers increased by 36.7 percent to 25.3 million.

Assessing the international businesses, Shameel Joosub, the group chief executive, said data continued to be a key growth driver with the number of active data customers rising by 69.5 percent.

“Data and the international businesses have once again been the largest contributors to growth, and the entire business is seeing the benefit of our sustained investment programme,” he said.

Narayanan said there was still significant market expectation for Vodacom to post some positive performances, following the takeover of Neotel, the country’s second-largest fixed line operator, for R7bn. The deal is still subject to approval by the competition authorities.

Joosub said the company’s drive to transform pricing through integrated contract price plans and prepaid bundles resulted in a 25.3 percent reduction in its blended price per minute (PPM) to 68c, compared with 91c last year.

“The total outgoing traffic grew 26.1 percent. Our pricing transformation strategy is designed to reduce our effective PPM and therefore the cost to communicate,” he said.

Joosub said the international operation’s service revenue grew 17.3 percent to R3.49bn, which was largely driven by continued customer growth, higher voice usage, greater data usage and M-Pesa.

“Although overall growth was impacted by intense price competition, the international segment’s contribution increased strongly to 23.4 percent of group service revenue.

“Our bundle strategy has increased our resilience against price competition in all our markets,” he said.

“We continued to refine the composition and size of our bundles to improve value to our customers, resulting in 21.7 percent growth in customers and 26.3 percent increase in minutes of use.”

Data revenue grew 51.1 percent to contribute 18.2 percent of service revenue.

International data revenue, excluding mobile money service M-Pesa, grew 69.5 percent, supported by the rise in active data customers to 8.3 million.

“M-Pesa revenue growth remained strong, up 33.9 percent,” he added.

The shares rose 0.8 percent to close at R127.11 yesterday.

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