Vodacom added 1.6 million active group customers during the third quarter ? 690 000 in SA and 876 000 in its international operations. This is according to the mobile operator's trading update for the quarter ended 31 December 2016.
Vodacom now has 65.2 million active customers across its five African markets. Strong growth in data demand outstripped declining voice revenue, with service revenue growth for the quarter growing by 5.5% year-on-year, to R13.4 billion in SA.
"Strong growth in SA was delivered through our strategy of sustained investment in network infrastructure, growing data demand and successful execution of our pricing strategy," says group CEO Shameel Joosub.
In SA, active customers grew 6.7% year-on-year, reaching 36.4 million. Active prepaid customers increased 6.8% to 31.2 million but prepaid average revenue per user (ARPU) was down 3% to R64, which Vodacom says is because it "continues to attract value-seeking customers". Active contract customers increased by 5.9% in the quarter, to 5.2 million, with contract ARPU up 1.2% to R414.
"ARPU growth was impacted by the customer disconnections of 75 000 by Altech Autopage and consequent revenue deferral release of R102 million in the prior year, excluding which ARPU grew 3.6%," Vodacom says.
Active international customer numbers dropped 7.5% year-on-year, to 28.8 million, as a result of disconnections during the fourth quarter of the prior year, in compliance with customer registration requirements.
"We have managed to claw back a significant amount of these customers, resulting in positive trends in net customer additions, adding 876 000 customers in the quarter," Vodacom explains.
Active customers in Tanzania dropped by 2.3% year-on-year to 12.4 million. The DRC's 9.7 million customers at the end of December was a 17.9% drop year-on-year, while Mozambique's subscribers fell 0.6% over the year to 5.2 million. Lesotho was the only bright spot, growing customers by 7.6% year-on-year to almost 1.5 million. On a quarter-on-quarter basis, all of the operations saw growth in subscriber numbers.
Show me the money
The third quarter saw sustained growth for the telecoms operator in terms of revenue ? with group revenue ticking up 1.2% to R21.2 billion and group service revenue growing by 1.3% to R17.4 billion. Service revenue growth was impacted by the strengthening of the rand to reporting currencies in international operations, excluding which normalised growth would have been 4.4%.
Joosub says he is pleased with what the group achieved in the quarter, including group data revenue increasing 18.4% to R6.5 billion, and representing 37.5% of service revenue.
"Performance was driven by strong customer growth in SA and strong data demand. In our international operations, the effect of customer disconnections in Q4 of the prior year are still impacting its performance."
SA's service revenue grew 5.5% to R13.4 billion in the quarter, driven by strong data revenue growth, while international service revenue declined 8.2% to R4.2 billion ? impacted by customer registration processes and currency volatility.
Voice revenue in SA declined 6.2% year-on-year, "due to the lapping of the 'Just 4 You' launch in the prior year, and a one-off impact from Altech Autopage in the prior year". However, data remains a key growth point and during the quarter, Vodacom sold 418 million bundles in SA, up 34.8% compared to a year ago. The number of bundle users also increased 13.3% to 16.3 million.
In its four international operations, mobile data revenue grew 2.6%, driven by a 12.4% increase in active data customers to 12.6 million. Data traffic grew 61.7%, "reflecting strong demand for mobile data services in all its markets".
"Challenging conditions in the DRC were offset by a better performance in Tanzania and sustained growth in Mozambique, resulting in a 3.4% increase in normalised international service revenue," Joosub says.
Meanwhile, M-Pesa revenue continues to grow strongly at 12.4% outside of SA. Vodacom added 1.1 million customers in the quarter to reach 12 million.
"Tanzania continues to improve on the M-Pesa offering, with 39% of airtime purchases going through the M-Pesa system in the quarter, compared to 32% in the prior year. DRC has more than doubled their number of customers, and in Mozambique, 42.6% of customers are now using the service."
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