The demand for data continues to be a key driver for Vodacom, which saw group data revenue grow by 28.5% for the financial year ended 31 March.
Overall revenue for the group grew 7.5% to R80 billion, while headline earnings per share (HEPS) rose 2.7% to R8.83 per share, "negatively impacted by re-measurement of foreign currency denominated intergroup loans and one-off BEE charges," it says.
"The acceleration in network investment over the past two years is a true success story of effective capital investment to ensure growth in revenue and customers," according to Vodacom Group CEO Shameel Joosub.
In SA, the network added another 2.1 million subscribers and now has 34.2 million customers locally.
However, overall subscriber numbers dropped to 61.3 million by 31 March, down from 61.6 million a year ago. The telco had grown its customer numbers to 65.2 million during the year, but customer registration requirements in the DRC and Mozambique forced this number down again.
Vodacom's operations outside of SA saw active customers drop 8.1% to 27.1 million. This as the DRC government ordered all unregistered clients to be disconnected in December 2015. In Mozambique, there has been a phased suspension since November 2015 and a disconnection programme for unregistered customers agreed by the government and operators.
Group EBITDA grew 12.8%, to R30.3 billion. A final dividend of R4 per share was declared, taking the total dividend to R7.95 per share for the year.
Local growth
"We spent R8.7 billion to upgrade our network infrastructure, which includes more than doubling our LTE/4G sites to over 6 000. This enabled us to increase LTE/4G coverage across SA to 58% (from 35%) to satisfy exceptional growth in demand for data," says Joosub.
In SA, revenue grew at 5.2% to R62.3 billion. This was underpinned by a 6.2% increase in equipment revenue, with 10.5 million devices sold in the year ? almost 62% of which were smart devices.
Data demand continues to be a strong growth area for Vodacom, with local data revenue growing 27.7% in the financial year, to R17.3 billion. This was helped by the number of active data users on the network expanding 12.7% to 18.7 million.
There was also improved access to more affordable devices, with active smart devices on the network increasing 22.8% to 14.1 million, driven mainly by the sale of low-cost Vodacom-branded devices, which account for 25.7% of total device sales.
The telecoms operator says its "compelling data offers" also propelled growth in data bundle sales by 85.9%, with average monthly data usage increasing 49.8% to 350MB per customer.
"Prepaid bundle purchases increased to over one billion. The success of these offers, as well as the migration to better value price plans, has resulted in improving trends on voice revenue."
Active prepaid customers increased 7.6% to 29.3 million, while active contract customer numbers were flat at 4.9 million, although contract average revenue per user increased 4.5% to R397.
Service revenue increased 4.9% to R49.3 billion as the business returned to growth following the 50% cut in mobile termination rates last year.
Joosub says looking ahead, Vodacom will continue to explore spectrum opportunities.
"SA is falling behind on broadband rollout and access. Due to the country's dependency on mobile data, it is key to secure access to spectrum to unlock this growth potential and fulfil the growing data demands of the population," he says.
During the period, Vodacom and Neotel confirmed a planned merger had been abandoned due to regulatory complexities and certain conditions not being fulfilled. Despite this, Vodacom says its ambitions to increase the rollout of fibre-based broadband services to homes and businesses remain.
"We will also continue to drive our customer experience and network advantage by investing heavily in resources and infrastructure. As was the case a year ago, we remain cautiously optimistic while being fully cognisant of the various changing regulatory and macro-economic environments," adds Joosub.
Further afield
"Our international operations grew strongly, with service revenue up by 16.2% compared to 10% growth in 2015. This was achieved in an environment of heightened security regulations where unregistered customers of all operators were suspended," says Joosub.
Overall international operations revenue grew 16.6% and now represent 22.9% of group revenue. The telco says it is particularly proud Vodacom Lesotho has now achieved revenue of over R1 billion.
The international operations continue to benefit from increased voice revenue of 14%, as well as 31.9% growth in data revenue driven by continued network investment. Mobile data revenue now comprises 22.6% of international service revenue.
Vodacom says M-Pesa revenue also continues to grow strongly at 19.3%, fuelled by expansion of the distribution channel and a growing ecosystem. This despite the operator announcing last week it was pulling the plug on the mobile money offering in SA.
Vodacom added 1.2 million customers across the group, increasing the number of active customers to 9.2 million. In Tanzania, M-Pawa (savings and loan product) is also gaining traction, with 1.6 million customers actively using the service.
Vodacom has operations in SA, Tanzania, Mozambique, Lesotho and the DRC.
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