Johannesburg - Cellular giant Vodacom had doubled the remuneration package of its chief executive, Shameel Joosub, in the year to March to R22 million on improved growth, it said in its annual report released on Friday.
Joosub was paid R22m, including R14m of short-term incentives compared with R11m last year, which included R3.7m of short-term incentives.
Although Vodacom had some problems – including the termination of the Neotel deal and the Constitutional Court order for it to compensate Nkosana Makate, the Please Call Me inventor – the overall performance in the year to March was solid.
Revenue
Revenue for the group rose by 7.5 percent to R80.1 billion. Data revenue jumped 28.5 percent to R21.3bn on higher demand for data services as customers were upgraded to 3G and LTE/4G devices.
Active data customers grew by 8.6 percent.
Service revenue also rose 7.4 percent, supported by continued customer growth, improving voice revenue trends and the expansion of our services in the enterprise market.
A total of R12.9bn was invested in networks and focused primarily at expanding our 2G, 3G and LTE/4G coverage, enhancing its network performance and improving the customer experience.
Vodacom’s proposed acquisition of Neotel, South Africa’s second national operator for fixed line services, collapsed owing to regulatory complexities and certain conditions precedent not being fulfilled.
The High Court ordered that it must pay half the money it would give to Please Call Me inventor Makate into a trust account pending the outcome of the arbitration, it was reported.
Joosub said in the annual report that the group’s focus on maximising the customer experience was delivering results across all it markets. “In South Africa, we added 2.1 million new customers. Contract customer churn in South Africa has dropped to 8.5 percent. Our international customer numbers have been negatively affected by customer registration compliance,” he said.
Joosub was expecting a weaker outlook for consumers in the year ahead in most of Vodacom’s markets, due to the depressed levels of economic growth, interest rate increases, inflation and the impact of the drought on food prices and disposable incomes.
Strategy
“While we haven’t yet seen a large deterioration in customer spend, we believe that this will be more progressive as consumers come under pressure. Given this context, our strategy of taking a segmented consumer view, personalising consumer offers through ‘Just 4 You’, and offering smaller-sized ‘hand-to-mouth’ bundles, is particularly relevant,” he said.
“Despite the tough macroeconomic pressures, Vodacom will continue to make the investments needed to diversify our revenue streams.
“We will be increasing our roll-out of fibre, driving demand for our enterprise and content services, and maintaining a strong focus on pricing transformation, data monetisation and the customer CARE initiative, while at the same time ensuring further progress in cost efficiencies,” he said.
Chairman Peter Moyo said over the past five years, the company had invested more than R55bn in network infrastructure, reflecting its strong confidence in the countries Vodacom operated in. “By enhancing access to voice and data, our network and service offerings are helping to transform lives and stimulate economic growth in these emerging markets,” he said.
Vodacom shares fell 0.37 percent to R163.30 on Friday.
BUSINESS REPORT