Vodacom service revenue up 7.6% in quarter ended June
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JOHANNESBURG - Mobile communications company Vodacom said on Thursday group service revenue was up 7.6 percent during the quarter ended June 30 while revenue rose 5.6 percent, benefitting from strong growth in South Africa as customer demand increased during a Covid-19 lockdown.
Vodacom, a South African firm which provides mobile voice, messaging, data, financial and converged services to 116 million customers, including those of Kenya's Safaricom, however said international operations were negatively impacted by lower economic activity from the effects of the coronavirus.
More than 15 million people have been infected with the virus around the world since last December, and the pandemic has disrupted economic activity.
Vodacom said South African service revenue growth was solid at 6.4 percent for the quarter, supported by strong demand for data and connectivity services, while international service revenue grew by 10.7 percent, benefiting from the devaluation in South Africa's rand currency.
This resulted in a 7.6 percent increase in service revenue across the group despite tougher economic trading conditions in most markets.
However, underlying performance was subdued, declining 5.3 percent partly as a result of lower economic trading activity in these businesses.
"In the face of an unprecedented global pandemic, Vodacom Group has responded rapidly to assist governments where it operates in curbing the spread of Covid-19 while also adapting to significant changes in customer demands and behaviour patterns," group chief executive officer Shameel Joosub said.
"In South Africa, the combination of increased demand for data following significant tariff reductions of up to 40 percent effected on 1 April and more people working and being educated remotely, resulted in a significant increase in mobile and fixed traffic in the first quarter."
He said the company had as a result accelerated network infrastructure spending by R500 million to R2.7 billion (about US$164 million) in the first quarter, and used the temporary assignment of spectrum by the Independent Communications Authority of South Africa (ICASA) to rapidly increase network capacity.
The temporary spectrum assignment also allowed Vodacom to fast track the launch of South Africa’s first mobile 5G network and its fixed 5G commercial service.
"While I am particularly pleased with the performance of our South African business, we remain cautious about the impact of Covid-19 on our operations and uncertainty about the pace of economic recovery in each of the countries where we operate as disposable income will increasingly come under pressure as a result of rising unemployment and reduced economic activity," Joosub said.
"Looking ahead, the long anticipated award of high-demand spectrum in South Africa remains instrumental in the data pricing dynamic in our largest market. Lengthy delays in completing the digital migration and allocating 4G spectrum continues to curb the pace at which data prices could have fallen."
ICASA is expected to complete its spectrum allocation process by December.
- African News Agency (ANA)