As at 30 June 2006, Vodacom Group recorded 25.2 million customers across its networks operating in South Africa, Tanzania, the Democratic Republic of the Congo, Lesotho and Mozambique, reflecting a 7.3% increase in the three months since 31 March 2006.
The growth in the customer base is a result of high gross customer connections of 3.5 million for the quarter. The group`s other non-South African operations comprised 4.9 million customers, or 19.3% of the total customer base.
South Africa
South Africa includes the operations of Vodacom South Africa, Smartphone SP (Pty) Limited, Smartcom (Pty) Limited and Cointel VAS (Pty) Limited.
South Africa increased its customer base by 6.4% since 31 March 2006 to 20.4 million customers in an increasingly competitive market. South Africa`s customer base comprises 2.5 million contract customers and 17.8 million prepaid customers, reflecting increases of 5.3% and 6.3% since 31 March 2006, respectively. South African ARPU declined to R121 per month for the three months to 30 June 2006, compared to R139 per month for the 12 months which ended 31 March 2006.
South Africa defines an active customer as a SIM card that had a revenue generating activity in the three months leading up to the reporting date. Up to mid-June 2006 calls forwarded to voicemail was regarded as a revenue generating activity, and such SIM cards classified as active customers. An analysis of the customer base, based on statistical sampling, has revealed that a material number of SIM cards have calls forwarded to voicemail as its only revenue generating activity. The majority of such messages are never retrieved by the customer. It is estimated that these SIM cards have an ARPU of less that R1 per month which is below the cost of maintaining such SIM cards on the network. It is therefore not justifiable to keep such SIM cards on the network.
South Africa has therefore decided to change its definition of an active customer to exclude calls forwarded to voicemail from the definition of a revenue generating activity. Such SIM cards would be disconnected from the network after being inactive for a 215 consecutive day period in accordance with the business rules of the company. The retrieval of a voice message by a customer is classified as a revenue generating activity.
Based on statistical analyses it is estimated that approximately 3.5 million affected prepaid SIM cards, included in the customer base on 30 June 2006, will be deleted by 31 December 2006. It is also expected that normal monthly churn from July 2006 onwards would increase as a result of the activity rule change.
The impact of the activity rule change will have an immaterial impact on revenue, but it would have the effect of increasing prepaid ARPU for the period.
South Africa customers, year-to-date ARPU and churn as at 30 June 2006 compared to 31 March 2006 are as follows:
[Table1]
Other non-South African operations
Vodacom`s other non-South African operations increased their total customer base by 11.6% since 31 March 2006 to 4.9 million customers. Satisfactory customer growth was achieved in all Vodacom`s other non-South African operations, most notably Mozambique with a 19.2% increase in its customer base.
Vodacom`s other non South African operations` customers, year-to-date ARPU and churn as at 30 June 2006 compared to 31 March 2006 are as follows:
[Table2]
[Table3]
Share
Editorial contacts