Vodacom Group, including Safaricom, has reached the 200 million customer mark for the first time. This emerged when South Africa’s biggest mobile operator today issued a trading update for the quarter ended 31 December 2023.
Group revenue for the JSE-listed Vodacom increased 26.8% to R38.9 billion, positively impacted by the acquisition of Vodafone Egypt.
It notes group service revenue growth, including Vodafone Egypt on a pro-forma basis, was 8.8%, at the higher-end of the firm’s medium-term target.
South Africa service revenue grew 1.9%, due to a strong comparative period in the prior year, says Vodacom.
Egypt grew service revenue 29.1% in local currency, with Egypt financial services customers up 55.5% to 7.5 million.
International service revenue increased 10.7%, as network investment accelerated data revenue growth, the company says.
Group financial services revenue increased 31% to R3.4 billion, with $98.2 billion transacted through mobile money platforms in the quarter.
Commenting on the 200 million customer milestone, Shameel Joosub, Vodacom Group CEO, says the telco had reached 100 million customers in 2018.
According to the company, 75% of its customers are using a financial service.
Vodacom’s rival MTN, which is Africa’s largest mobile operator, has over 270 million customers in Africa and the Middle East.
“As a purpose-led company, the transformational impact we have on our customers and the economies in countries where we operate provides a strong foundation upon which we are able to ensure sustainable growth of our businesses,” Joosub says.
“We remain Africa’s largest mobile money platform by transaction value processed, with a value of close to $100 billion in the quarter. Our super app rollout across the footprint remains a major focus for the group.”
In South Africa, he says, VodaPay reached 4.8 million registered users, with the summer campaign driving strong user engagement on the platform.
“In South Africa, we delivered satisfactory revenue growth of 4% considering the strong comparative, as a result of heightened load-shedding in the prior year quarter,” Joosub notes.
“Looking ahead, we are fully alert to the financial constraints on customers caused by the high cost of living and remain committed to delivering innovations that enhance the value we deliver to customers to help alleviate cost of living pressures.
“We are also mindful of an evolving macro-economic environment across our footprint, including foreign exchange rate risk, and expect that our business model will continue to demonstrate its resilience.”
The South African-headquartered mobile operator also reported several milestones in its African operations. These include Vodacom Mozambique’s 20-year anniversary, the trialling of 5G in the DRC, and the announcement of Project Kuiper, a strategic collaboration with Amazon’s low Earth orbit satellite communications initiative.
“Having operated in Mozambique for two decades, its anniversary highlights the contribution Vodacom has made to digital and financial inclusion in the country and more broadly across our footprint,” Joosub says.
“A prime example of this impact across our footprint is in our financial services business, which connects more than 75 million customers and facilitates $1.1 billion a day in mobile money transaction value.”
He notes Project Kuiper adds to the company’s satellite partnerships that will extend the reach of 4G and 5G services to more customers in Africa, and in particular, areas that may otherwise be operationally challenging or prohibitively expensive to serve via traditional fibre or microwave solutions.
On a pro-forma basis, which includes Egypt as if it was owned from 1 April 2022, revenue growth was 9.6%.
According to Joosub, in Egypt, local currency revenue growth of 31.5% was underpinned by a strong performance from mobile data, fixed and financial services, including a 40.7% improvement in data traffic.
“Across our international business segment, it was pleasing to see that our network investment contributed to a 25.4% increase in 4G sites, which ultimately supported an acceleration of local currency revenue growth.
“As we combine network investment with our focus on digital inclusion and handset financing and rural coverage models, we expect these will unlock further meaningful growth opportunities across our eight markets.”
New revenue streams
Revenue from new services – financial and digital services, fixed and internet of things – is well on track to reach the target contribution of 25%-30% over the medium-term, says the firm.
In the quarter, the contribution of new service revenue exceeded 20% for the first time, equating to R6.2 billion.
“Financial services remains the largest component of new services, having grown 31% to R3.4 billion in the quarter, largely on the back of scaling new products and strong customer growth of 12%,” Joosub states.
“Longer-term, we will relentlessly pursue our purpose of connecting people for a better future. I firmly believe the continued execution of our strategy has the potential to create immense economic value in the markets where we operate, which in turn will help address inequality.
“In particular, we will continue to drive access to smartphones, financial services, healthcare and education to every person across our markets,” he concludes.