Vodacom, SA's largest cellular operator, grew revenue in the three months to June, compared with the same quarter last year, despite lower spending from local subscribers.
Vodacom this morning released its update for the first quarter and said revenue gained year-on-year, moving up 9.3%, to R17 billion, the bulk of which - R14 billion - came from its local operations. However, quarter-on-quarter, the group saw revenue down 0.9%.
Outgoing CEO Pieter Uys says: “Overall, this was a good quarter with a particularly strong performance from our international operations supporting group service revenue growth of 8.7%.”
Uys will step down from the company next March and will be succeeded by former Vodacom SA MD Shameel Joosub.
Service revenue gained 8.7% year-on-year, to R14.7 billion, but lost traction quarter-on-quarter, slowing by 1.3%. The international segment gained 46.7% year-on-year and 6.3% on the last quarter, to R3 billion.
Vodacom operates networks in Tanzania, the Democratic Republic of Congo, Mozambique and Lesotho.
More subscribers
Uys says one of Vodacom's key advantages in SA is the size and reach of its network.
Subscribers increased to 37.6 million in SA, a year-on-year improvement of 35.8% and a quarterly gain of 9.8%. International subscribers came in at 19 million, a year-on-year move up of 7.3%, but a decline of 17.5% on the previous quarter.
“Given the increasingly competitive environment, quality and capacity both set Vodacom apart and give us the means to compete with targeted value promotions,” says Uys. He explains that Vodacom4Less, NightShift and the recent Power Hour offerings tap into excess capacity on its network during slack periods, which allows it to offer competitive prices for its customers.
However, minutes of use per month in the local market have dropped to an average of 96 from March's 103, while an average of 116 were used in the quarter to June 2011. In addition, average revenue per user slowed in SA to a blended amount of R130, from R144 in March and R164 last June.
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