JSE-listed Vodacom, SA's largest cellular operator, lost R400 million in revenue, as a result of lower interconnect rates.
The group, which yesterday reported its interim results for the six months to February, said local service revenue growth was almost flat. Total group service revenue was up 6.9%, to R29.7 billion.
CEO Shameel Joosub says the effect is likely to be about the same in the second half of the year, taking the total lost revenue for the group to around R800 million. On a net basis, taking into account payments to other operators, Vodacom lost R220 million on its profit line in the first half of the year.
In 2010, the Independent Communications Authority of SA decreed that cellular interconnect costs had to drop to 73c at peak and 65c during off-peak times, from March 2011.
This year, rates dropped to 56c and 52c, respectively. By March 2013, wholesale mobile termination rates will drop to 40c, regardless of the time the call is made.
Fixed-line rates will also drop, and will settle at 12c for peak and off-peak for local calls, while the rate for national calls will settle at 19c in March 2013.
Joosub says Vodacom expects another decline in revenue from interconnect next March.
Vodacom has a total active customer base of 50.1 million, a 20.8% gain year-on-year. Of these, 30.8 million are in SA. Locally, the effective price per minute has decreased to R1 during Vodacom's first half, while the effective price per megabyte has dropped 24.2%, says Joosub.
Joosub says Vodacom is facing regulatory and competitive challenges, as well as inflationary pressure. Total voice revenue gained 7.3%, to R17.6 billion, while data grew 20.2% to contribute 16% of Vodacom's service revenue.
In SA, service revenue was almost flat in the first six months of the year, gaining 1.3%, to R23.8 billion. Its international operations gained 36.5%, to R6 billion, contributing 20.2% to total revenue, up from 16.9% a year ago.
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