Johannesburg - Vodacom, SA’s largest cellphone company with more than 33.7 million customers, says it has continued its solid start to the year as revenue overall continued to gain ground.
For the three months to December, Vodacom reported overall revenue up 8.7 percent to R21.7 billion. When stripping out foreign exchange movements, revenue gained 7.6 percent. Service revenue, which is income it earns off the network, gained 9.8 percent to R17 billion.
Data once again continued to be a strong driver and gained 27.5 percent to R5.5 billion and is now 32 percent of service revenue.
However, data revenue is typically at lower margins than voice income, and voice turnover is being eroded by the increased use of data for services such as WhatsApp.
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Overall, Vodacom grew its subscriber base 6.8 percent to 65.2 million and it now has 30.3 million data customers, a figure that grew 14.5 percent in the quarter.
South Africa service revenue grew 7.2 percent to R12.7 billion, while international service revenue increased 15.2 percent (or 9.8 percent when currency fluctuations are stripped out) to R4.5 billion.
Vodacom has operations in South Africa, Tanzania, the Democratic Republic of Congo, Mozambique, Nigeria and Lesotho and considers its operations outside of SA to fall under its international cluster.
CEO Shameel Joosub says the company has “successfully executed on our strategy and achieved another quarter of improving revenue trends”. He attributes the growth, in a weak economic environment, to “the positive impact from our substantial network investment”.
“We have expanded our network coverage and increased data speeds to secure network leadership.”
The company, 65 percent owned by UK’s Vodafone, also spent R9.5 billion in the nine months to December, which is 15.4 percent of group revenue.
However, Joosub cautions revenue growth will taper slightly into our last quarter of the financial year thanks to a stronger prior year by comparison and a weaker outlook for the consumer in South Africa due to the drought and weaker exchange rate.
IOL
Pick up a copy of Business Report tomorrow for more indepth coverage of this issue.