Vodacom's interim revenue grew over 6%, boosted by strong growth from its operations outside of South Africa. International operations' revenue grew 12.6% and now represent around 21% of group revenue.
This as the telecoms giant today released its interim results for the six months ended 30 September, which showed 5% revenue growth from its South African operations, while subscriber numbers for the group grew 6.8% to 65.1 million active customers.
"In our international operations, we achieved good customer growth of 10.6%. Service revenue reached double-digit growth of 12.4%, stepping up from 7.4% in the second half of last year," says Vodacom Group CEO Shameel Joosub.
He says the company has had a strong start to the year with "sustained growth underpinned by network superiority, customer value management excellence and distribution leadership".
"We lifted group capital expenditure 5.8% to R6.2 billion, expanding 3G coverage in all our markets. In South Africa, LTE/4G coverage increased from 32.2% to 46.8%," says Joosub.
Group data revenue soared by 33.5% and the company says its LTE/4G customers in South Africa are now approaching two million and consume almost three times more data than 3G customers.
"I am most encouraged by the increasing demand for data services as we make devices and data bundles more affordable. We now have 28.3 million data users across the group," says Joosub.
"There are good opportunities ahead of us, as only 66% of our monthly active customers in South Africa are using data and our share in fixed services is only a fraction of what it is in mobile."
SA business going strong
Vodacom saw active customers in South Africa, its biggest market, reach 33.7 million, with 1.6 million net customers added in the first half. This was supported by increased voice usage and continued data average revenue per user expansion as customers traded up their phones.
The company increased its contract customers by 2.4% to 4.9 million, while SA data revenue grew by more than a third to R8.3 billion, due to growth in the demand for data.
"The improved affordability of both devices and data bundles supported a 48% increase in data traffic."
Active data customers increased 6.8% to 17.8 million and active smart devices on the network increased by almost 31% to 12.6 million. Tablets on the network increased 126% to 1.4 million "following the success of the Vodacom-branded 3G Smart Tab".
In September, Vodacom entered into a purchase agreement with Altech Autopage to buy the Vodacom customer base from the group. The transaction is still subject to approval by the competition authorities but MTN, Vodacom and Cell C together agreed to pay almost R1.5 billion for the Autopage subscriber base.
Neotel limbo
Vodacom is still awaiting approval from the Competition Tribunal for its proposed acquisition of Neotel, a deal which has been about 18 months in the making.
"Neotel, which is pending Competition Tribunal approval, will further enhance our ability to contribute meaningfully to the development of fixed-line services, broadband and fibre to homes and businesses in South Africa," according to Joosub.
Vodacom's application before the Competition Tribunal will be heard between 23 November and 11 December but tomorrow Vodacom's rivals head to the High Court to try to hold up the process. Telkom, Cell C and MTN will ask the court to set aside the Independent Communications Authority of SA's decision to approve the R7 billion deal.
African business growth
Vodacom's international customers increased 10.6% to 31.4 million, as the telco added 1.8 million customers during the period in markets outside of South Africa. Vodacom's international operations offer services in Lesotho, Mozambique, Tanzania and the DRC.
The service revenue from international operations now makes up over a quarter of group service revenue and Vodacom says it continues to see customer growth in the segment fuelled by increased usage of voice and data services.
International data revenue grew 34%, driven by a 14.2% increase in active data customers to 10.5 million. Data contributed 22.5% of service revenue, up from 18.9% a year ago.
"M-Pesa continues to grow strongly in all our markets, fuelled by expansion in the distribution channel and a growing ecosystem. We added 1.2 million customers in the six-month period, increasing the number of active customers to 9.2 million, an increase of 30.3% from the prior year."
In Tanzania, M-Pawa (savings and loan product) is also gaining traction, with 1.3 million customers actively using the service.
Vodacom says international capital expenditure increased by almost 25%, as the company continues to invest significantly in all other markets "to strengthen network and service differentiation". The telco increased the number of international 3G sites by 46.6% and 2G sites by 24.2% over the period.
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