JSE-listed Vodacom sees data offering superior growth opportunities in the future, as the use of voice slows and will need to be offset by data gains, which offers higher margins.
The company this morning reported its results for the year to March and said group revenue gained 4.5%, to R70 billion. However, the "outstanding features of the year's performance were sustained strong growth in data services of 22.2%, with increased smartphone adoption driving demand," says CEO Shameel Joosub.
Data revenue gained 22.2%, to R10 billion, contributing 16.8% to overall service revenue of R59.3 billion, up from 14% a year ago. Vodacom now has 18.5 million active data customers, a 22.5% gain as it continues to drive smartphone penetration.
Joosub expects data to account for between 25% and 30% of overall revenue within the next three to five years. CFO Ivan Dittrich says data provides a "superior" growth opportunity than the one presented by voice.
The operator now has 6 167 3G base stations, as well as 9 348 2G sites and just more than 600 sites on long-term evolution (LTE) in SA, after it became the first operator to launch the next-generation service in October last year. Joosub says 66% of Vodacom's SA sites are LTE-ready.
In the local market, data revenue increased 16.3% to R8.9 billion, contributing 18.4% to service revenue, compared to 15.8% a year ago. Joosub says SA will play an important role in data growth and should continue growing in the 20% range.
Data traffic grew 39.5% which more than offset a 17.9% reduction in the average effective price per megabyte, in the local market. "Growth was driven by higher penetration of smartphones and increased mobile Internet usage," says Vodacom.
Vodacom has also invested in working capital to provide financing to consumers in a bid to drive the affordability of smartphones. During the year, it added an additional 1.2 million smartphones, taking the total to six million, half of which are BlackBerry devices.
Average monthly use gained 43.4%, to 139MB, from its 14.4 million active data customers, which grew 18.1% in the year. International service revenue grew 11% due to a larger customer base and increased take-up of data services. The international operations now contribute 19% to group service revenue compared to 17.4% a year ago.
Data revenue leapt 106.9%, supported by 40.9% growth in active data customers to 4.1 million, 19.3% of the international customer base.
The international market provides a huge opportunity, notes Joosub. He says the company needs to push more smartphones and is working on making cheaper devices available.
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