Johannesburg - Vodacom Group Ltd., the wireless operator with the most subscribers in South Africa, plans to increase investment in Africa as it speeds up the pace of network upgrades.
“In South Africa we’ve been investing 7 billion rand ($677 million) a year and we want to notch that up a couple of levels,” chief executive Shameel Joosub said on a conference call today.
The company will increase capital spending as a percentage of revenue to as much 17 percent from 13 percent in 2013, he said.
Vodafone Group Plc, the world’s second-biggest wireless provider, is putting aside about $10 billion from the sale of its Verizon Wireless stake in the US to upgrade networks for units including Johannesburg-based Vodacom, in which it owns 65 percent, as part of an investment plan known as Project Spring.
“We put together a program about how we want to accelerate our investment in South Africa and the opportunity presented by Project Spring makes it easier for us,” Joosub said.
The additional spending will also go toward the improvement of 3G network connections in Tanzania, he said.
Vodacom is increasingly focused on small-to medium-size business customers and is seeking to buy Internet provider Neotel Pty Ltd.
The company’s earnings per share excluding one-time items climbed to 4.39 rand in the six months through September, compared with 3.96 rand a year earlier, it said in a statement today.
Sales rose 6.6 percent to 36.7 billion rand.
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Vodacom shares gained as much as 1.7 percent, the most in almost three weeks, and traded 0.5 percent higher at 115.46 rand as of 10:36 a.m. in Johannesburg.
The increased investment in South Africa will help improve fibre access to homes and businesses and enable a faster roll out of 4G networks, Joosub said on the call.
“In Tanzania, it’ll be more about 3G coverage but also making sure we’ve captured the opportunity in rural coverage.”
Data revenue from Vodacom’s international operations, which include Tanzania, more than doubled to 985 million rand, while its total mobile data revenue rose 29 percent to 6.1 billion rand, according to the statement.
Vodacom’s number of active customers rose 9.7 percent to 53.8 million as the company added 949,000 subscribers in South Africa and 2.3 million internationally, the company said.
Vodacom also operates in the Democratic Republic of Congo, Mozambique and Lesotho. - Bloomberg News