Vodacom, which has 57 million subscribers across its five operations, sees the international arena, with low levels of penetration, as a big opportunity for growth.
Its international operations - in Lesotho, Mozambique, Tanzania and the Democratic Republic of Congo - now account for 45.2% of Vodacom's active customer base, after gaining 21.8% in the past year. In the year to March, it said service revenue from its units outside of SA grew 23.4%, or 18.4% if currency fluctuations are stripped out.
Data revenue grew 105.2%, driven by an 86.4% growth in active data customers to 7.7 million; 29.6% of the active customer base is now using data. "Our data bundle propositions stimulated further demand, resulting in a threefold increase in our data traffic," says Vodacom.
CEO Shameel Joosub says Vodacom has a "big opportunity" to grow its African operations because of the low penetration rate. He hopes Vodacom can capture the opportunity faster than its rivals.
Bigger deals
Joosub adds Vodacom expects operations that are not aligned to a large entity to come up for sale and the company is "perfectly poised" to benefit from this situation, as it does not have too many countries on its "plate".
Vodacom has been seeking another African operation for some time, but has yet to ink a deal.
The operator did consider buying Orange's Ugandan operation, says Joosub, but notes it is too small to gain traction. He says Vodacom would buy based on the available penetration and the operation's size.
This morning, the Orange Group said it would sell its majority stake in Orange Uganda, for an undisclosed sum, to Africell Holding. The deal, it said, "marks a new step in the Orange Group's asset portfolio optimisation strategy for which Africa and the Middle-East remain a strategic priority".
Orange Uganda, which was created in 2008, is the third telecoms operator in Uganda and had 620 000 subscribers at the end of December 2013.
Vodacom CFO Ivan Dittrich explains the company has extended its debt maturity and can fund further merger and acquisition activity through its balance sheet. This morning, the group said it had agreed to pay an enterprise value of R7 billion for Neotel, which it will pay for through existing cash resources and debt facilities.
Dittrich said Vodacom's balance sheet was very lowly geared, with net debt of R8 billion and cash on hand of R6.1 billion. This will allow the group to handle any mergers and acquisitions that may arise as part of its growth strategy.
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