Cellular firm Vodacom says it is not all easy going in its African operations and, while most of its assets on the continent reported growth, Mozambique was still the laggard.
Reporting the company's interim results to end-September, in Midrand yesterday, CEO Alan Knott-Craig said Mozambique saw its loss increase in the half thanks to a foreign exchange impairment.
Revenue was R108 million, up 45.9% from R74 million year-on-year. Its loss, however, was over 200% higher at R138 million, from R25 million.
Vodacom has 33% of the market in Mozambique, which has 19.7 million people and a cellular penetration of 10.7%.
However, Knott-Craig said the company was finding it difficult competing against the government-owned competitor but had its "shoulder to the wheel" and would turn the operation around in a few years.
Shining jewels
Tanzania had become a "substantial" part of Vodacom's business. Vodacom has 55% of the market share in a country that has a cellphone penetration of 12.6% and a population of 37.4 million.
The SA-based cellular firm increased its subscribers by 61.5% in the half-year to 2.6 million. Revenue from Tanzania increased 26.8% to R775 million.
Capital expenditure as a percentage of revenue increased from 17% to 37.3%, a 20.3% increase. However, capital expenditure per customer declined from R904 to R788, a 12.8% decrease.
Knott-Craig said Vodacom would "need to spend a lot more capex" as the company extends its infrastructure.
In the Democratic Republic of Congo, the company has seen "super growth", but determining actual penetration is tricky as many Congolese share phones. Vodacom's figures indicate it has a market share of 49% in a country with a population of 62.7 million and cellular penetration of 6.6%.
Vodacom saw its customer base there increase 64%, to 2 million, from 1.2 million. Revenue moved up 38.4%, from R649 million to R898 million. It indicates economic conditions are in an upswing, boding well for further growth.
Turning to Lesotho, Knott-Craig said this was the only country in which Vodacom had margins of over 40% and it was the star in the company's crown.
"I just wish there were more people living there," he said of the country that has a population of two million and a market penetration of 14.7%. Vodacom has 80% of the market and 238 000 customers.
This is a 39.2% increase, from 171 000, year-on-year. Revenue climbed 36.4%, to reach R105 million from R77 million.
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