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Vodacom sees data gain

Data and international operations continue to be key growth drivers, says Vodacom CEO Shameel Joosub.

Data and international operations continue to be key growth drivers, says Vodacom CEO Shameel Joosub.

Vodacom saw data revenue surge 28.2% in the first three months of the financial year, as active data customers grew 23.3% to 19.4 million on the back of growing smartphone penetration.

The company this morning said revenue overall was slightly higher, gaining 3% to R17.5 billion, in the three months to June. Stripping out the sale of Gateway Carrier Services and the impact of foreign exchange translations, growth was 5.1%.

“Data and the international operations remain key parts of the growth story,” says CEO Shameel Joosub.

However, group service revenue, which is income earned from the network, was flat at R14.6 billion, up 2.3% on a normalised basis. Vodacom now has 51.5 million customers after growing the base 5.3% in the quarter, mostly off the back of expanded coverage in its international operations, which includes Lesotho, Mozambique, Tanzania and the Democratic Republic of Congo.

Vodacom says its international operations delivered “robust growth” and service revenue was up 14.1%, which it says was supported by customer growth and increased adoption of data and financial services.

The international operations added just under 3.3 million customers in the past year, notes Joosub.

Handset push

In South Africa, revenue gained 3.9% to R14.5 billion and was boosted by increased handset sales as equipment sales came to R2.7 billion in the quarter. Vodacom says, to make smartphones and tablets more accessible to customers, it offers financing to cover the portion of the device costs not included in the normal monthly subscription.

The financing is recorded as equipment revenue, and thanks to strong uptake, has resulted in an increase in the proportion of non-service revenue to service revenue. “This strategy has helped us reduce the level of investment in customer acquisition costs.”

The cellular company adds that, in South Africa, the service revenue trend is improving with a reported decline of 0.2% to R11.7 billion, and would have grown 2.9% if the impact of mobile termination rates is stripped out. It dropped 2% in the last quarter of the previous year.

Joosub says data revenue in South Africa increased 21.8% and now accounts for 21.3% of service revenue, up from 17.5% a year ago. “Continued network investment supported the increase in data traffic in South Africa, with 1.3 million additional smartphones active and using on average 75% more data per device than a year ago.”

“We’ve seen a substantial increase in traffic as a direct result of executing on our commercial strategy and launching new products across all of our operations,” says Joosub. “As an example, by focusing on value offerings that allow people to talk for longer, we’ve grown prepaid minutes of use by 21% in South Africa.”


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