The possibility exists that Vodafone`s Kenyan and Egyptian operations could be placed into Vodacom`s portfolio, says Vodacom CEO Alan Knott-Craig.
He was replying to an analyst`s question at the cellular network operator`s presentation of its interim results in Midrand this morning.
Speculation that UK-based Vodafone might include the operations in Vodacom`s portfolio follows an offer by Vodafone to buy VenFin`s 15% stake in Vodacom for R14 billion.
The offer is part of a R21 billion deal involving the takeover of all of VenFin`s shareholdings.
Vodafone already owns 35% of Vodacom, which means that if the deal goes through Vodafone will share control with Telkom, which owns the other 50% of the SA-based cellular group.
Knott-Craig says that Vodacom management is sorry to lose VenFin as a shareholder, describing it as "a very good shareholder".
However, now that VodaFone is becoming a bigger investor in Vodacom, it would make sense for the group to look after its investment.
"It is possible, as we go forward in talks with them, that we might be able to include portfolios such as that [Kenya and Egypt] in our portfolio. But the VenFin/Vodafone deal must first be finalised," he says.
"Certainly it would be very useful for Vodacom to be involved within these markets in the next year or two."
The numbers
Vodacom achieved revenue of R16.18 billion for the six months to end-September, up 22.3% from the R13.23 billion for the same period a year earlier.
Total subscribers across the group`s operations numbered R19.1 million - a 41.8% increase over the year-earlier period, and Knott-Craig says the numbers passed the 20 million mark last week.
Profit from operations rose 66.7% from R2.53 billion to R4.23 billion, while the group achieved a pretax profit of R3.84 billion versus a previous R2.55 billion. A net profit of R2.39 billion compares with a year-earlier profit of R1.45 billion.
SA is still the group`s main base, with revenue of R14.76 billion (September 2004: R12.06 billion) accounting for about 91% of total revenue.
Revenue in Tanzania grew 29.4% from R472 million to R611 million and Lesotho grew 18.5% from R65 million to R77 million, while Mozambique rose 72.1% from R43 million to R74 million.
Revenue growth in the Democratic Republic of Congo (9.3% from R594 million to R649 million) was the slowest owing to the deterioration of the local currency, says Vodacom CFO Leon Crouse.
Knott-Craig says that in SA, where customers numbered 15.8 million at the end of the period, total traffic increased by 19.3% year on year to 8 billion minutes.
Average revenue per user (ARPU) in SA, where market share is estimated at 57%, declined 10.9% from R165 to R147. However, Knott-Craig says ARPU is not as important as ARPU margins.
He says significant indicators are customers per employee, which increased from 2 845 to 3 829, and capex per customer, which declined from R1 692 to R1 422.
Crouse says the net debt-to-equity ratio is purposely low at 13.8%. "It`s low because, if we need to make a big investment in expanding our territory, we have the ability to raise funds at short notice."
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