Johannesburg - Vodacom Group, the cellular 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 R7 billion a year and we want to notch that up a couple of levels,” chief executive Shameel Joosub said on a conference call yesterday.
The company would increase capital spending as a percentage of revenue to as much 17 percent from 13 percent this year, he said.
Vodafone, the second-biggest wireless provider, is putting aside about $10bn (R103bn) 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 programme 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 would also go toward the improvement of third-generation (3G) network connections in Tanzania.
Vodacom is increasingly focused on small to medium-sized business customers and is seeking to buy fixed-line operator Neotel.
Headline earnings a share climbed 10.9 percent to R4.39 in the six months to September from a year earlier, Vodacom said yesterday. Revenue rose 6.6 percent to R36.7bn.
The increased investment in South Africa would help improve fibre access to homes and businesses and enable a faster roll out of fourth-generation (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 R985 million, while its total mobile data revenue rose 29 percent to R6.1bn.
Vodacom’s number of active customers increased by 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.
Vodacom shares gained as much as 1.7 percent yesterday, but closed 0.15 percent down at R114.75. – Bloomberg