JOHANNESBURG - VODACOM yesterday stood by its roaming agreement with Rain as it announced strong financial results during the six months ended in September, including an R7.6 billion interim dividend on the back of solid revenue growth.
Partly state-owned Telkom last month approached the Competition Tribunal to declare the suite of spectrum arrangements between Vodacom and Rain as a merger that should have been notifiable in terms of the Competition Act. Speaking during the group’s virtual interim results presentation, Vodacom chief executive Shameel Joosub said the Rain arrangement was no different than the agreement Telkom had with Vodacom.
“Telkom is roaming on the Vodacom network, Cell C is roaming on both the Vodacom and MTN networks. We have made no secret that because we are capacity constrained and Rain had the capacity, we bought capacity from them through a roaming arrangement,” said Joosub, adding that the arrangements had been tested by both the Competition Commission and the Independent Communications Authority of South Africa (Icasa).
“We see it as a ploy to get a bigger share of the spectrum,” Joosub added. Icasa last month began the process of making spectrum available to reduce the cost of communication, especially data.
Vodacom declared a R4.15 a share interim dividend period compared with R3.80 a share a year earlier, after receiving an R2.8bn dividend from
Safaricom, its investment in Kenya in the first half of the financial year.
The group’s free cash flow surged 92.1 percent to R5.3 billion reflecting cash generated from operations and the dividend from Safaricom.
Headline earnings had increased by 15.4 percent to R9bn, compared with R7.8bn a year earlier while headline earnings per share were R5.32 compared with R4.60 a share in September last year. Group revenue jumped by 7.8 percent to R47.8bn, supported by a 7 percent growth in service revenue to R38.5bn.
“Considering the magnitude of challenges arising from the pandemic in the past six months, it is particularly pleasing that we recorded a solid financial performance at the group level, where service revenue increased 7 percent. This was underpinned by strong growth from our Consumer and Enterprise businesses in South Africa, where service revenue rose 7.1 percent despite reductions of up to 40 percent in monthly data bundles which came into effect on April 1, 2020,” Joosub said.
South Africa service revenue grew 7.1 percent and data usage in South Africa surged 86 percent as people worked from home.
Vodacom said it now served 120 million customers across the group, including Safaricom, after adding 4.1 million customers during the quarter under review.
Vodacom advanced R5.7bn in airtime with 38 percent of total recharges via its Airtime Advance platform to 10.1 million customers.
Insurance policies increased 23.4 percent to 2 million, with revenue up 13.5 percent.
Vodacom shares closed 3.79 percent lower at R123.08 on the JSE yesterday.