Vodacom, SA's largest mobile operator, expects to spend about another R8 billion on its network this year.
This comes as it increases network investment to cope with increasing amounts of data use, which it hopes will offset the decline in spending on voice. In the year to March, data revenue gained 25% to R16.6 billion and it now has 26.5 million data customers across all its operations.
Vodacom spent a total of R13.3 billion on its network during the year, with R4.6 billion of this going into its international operations. In South Africa, it invested R8.6 billion, most of which went into its radio access network (41%).
During the year, the company grew its 3G sites to 8 802, a 21.4% gain, and also boosted its 4G sites 183.8% to 2 600. Data now accounts for 29% of its South African service revenue.
The cellular operator is now entering the second year of its three-year accelerated capital spending programme. It says this year's spend should come in at between 14% and 17% of group revenue.
In the year to March, Vodacom again reported flat revenue, which only gained 1.1% when foreign exchange benefits are stripped out, to R77.3 million. However, service revenue - which carries the effects of mobile termination pay-outs - dropped 1% to R62.17 billion.
Vodacom also invested in properties and shops as it continues to convert outlets to the new look. The revamped outlets, says CEO Shameel Joosub, have led to increased contract and prepaid takeup.
Of this year's local network investment, 6% was spent on property, 17% on IT, intelligent networks received 8% and its transmission network received 20%. Vodacom has almost converted its entire backhaul on its network to fibre, which allows it to self-provision as well as offer improved speeds.
Vodacom CFO Ivan Dittrich says the company has sufficient space on its balance sheet to gear up debt and fund further expansions, or deals. Currently, Vodacom owes R16.7 billion on a net debt basis, almost double what it owed a year ago.
The company explains this is mostly as a result of its increased investment in Tanzania, where it increased its stake. Vodacom held its dividend cover at 90% of headline earnings and paid out R7.75 a share, a 50% decline on last year as it came under profit pressure.
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