Vodacom believes falling voice revenues will be balanced by data revenues. Photo: Bloomberg
JOHANNESBURG - Mobile communications company Vodacom’s share price on the JSE yesterday surged 5.45percent after the group reported a 13percent year-on-year increase in active customers in the quarter ended December 31.

In a quarterly update, Vodacom said it added 2.5million active customers in the last three months of 2017. There were 1.6million new customers in South Africa and 900000 in its international operations.

Group revenue in the quarter increased by 6.7percent to R22.6billion. Vodacom’s data revenue increased by 9.7percent to R6.6bn. This is a continuation of the strong data revenue growth that Vodacom has been experiencing.

In its interim results for the six months ended September 30 - released in November last year - Vodacom announced that data revenue in South Africa had grown 15percent to R11.4bn, surpassing the contribution from voice for the first time, Vodacom said. In that six months period, data revenue accounted for 42.6percent of the company's service revenue.

Revenue from mobile voice in the quarter ended December 31 was down 1.2percent.

Vestact portfolio manager Byron Lotter said yesterday that data revenue would make up for the falling voice revenue.

“Data revenue is poised for further growth. The smartphones are data reliant. People are increasingly using data for banking, social media and other activities,” said Lotter.

Vodacom chief executive Shameel Joosub said in a statement to shareholders that the group’s strategy to invest in its network contributed to the increase in customer numbers.

“In South Africa, our customer base grew 14.4percent to 41.6million, contributing to the 6.2percent increase in revenue, underpinned by a resilient pre-paid voice market and a highly successful summer campaign.

“During the quarter we delivered on our promise to reduce out-of-bundle data prices, evidence of our commitment to reduce the cost-to-communicate through our pricing transformation journey; this resulted in a 24.2percent decline in effective data prices for the year. To compensate for the expected shortfall in revenue, we have undertaken a range of initiatives to stimulate usage. Monthly trends towards the end of the quarter show that this is having the desired effect,” said Joosub.

Vodacom said data revenue from South African operations increased by 8.7percent to R6bn.

At the same time, there were 1.5million new prepaid customers during the quarter. Prepaid active customers increased by 16.3percent year-on-year, Vodacom said.

The group said data revenue in its international operations increased by 19.5percent. In the quarter, data customers increased by 1.3million to 16million.

“Delivery on our device strategy of providing customers with access to better low-cost smart devices, has enabled higher smartphone penetration, resulting in increased data demand. We continue to focus on improving data monetisation in all markets as demand grows rapidly,” said Vodacom.

The group said revenue from M-Pesa soared by 33.3percent to R653m.

“We continue to grow the number of products on the M-Pesa platform, focusing on growing the merchant payment system in Tanzania, as well as adding new services in all other markets such as bulk payments. This helped fuel the increase in transactions processed through the system,” Vodacom said.

Vodacom shares rose 5.45percent to close at R163.50 on the JSE yesterday.

- BUSINESS REPORT