The Vodacom Group today released its results for the six months ended 30 September, which show the total number of Vodacom customers increased 13.1%, to 35.7 million, and revenue increased 14%, to R26 billion.
Profit from operations increased by 12.5%, to R6.4 billion, and EBITDA increased by 13.9%, to R8.7 billion. Net profit, after taxation, grew 3.2%, to R3.8 billion, while cash generated from operations increased by 15.6%, to R8 billion.
"I'm pleased with our performance over the past six months, with strong growth evident in all key areas including customer numbers, revenue and profits," says CEO Pieter Uys.
Total ARPU (average revenue per user) increased 5.7%, to R111, and South African ARPU increased 8.2%, to R132, driven by strong growth in data revenue and as a result of the application of a more aggressive prepaid deletion rule.
The data segment continued to grow rapidly, with revenue up 43.3% on last year and now accounting for 13.1% of Vodacom's service revenue, the company says.
Frost & Sullivan ICT analyst Spiwe Chireka says it remains to be seen whether growth in ARPU is sustainable, “as competition in the region is intense and products and services are increasingly being replicated. As competition intensifies, operators often have to reduce tariffs in order to gain market share, and there are no indicators to say that this will not happen in the data segment.”
Vodacom concluded two important acquisitions during the period under review, both of which are part of Vodacom's strategy to move from a mobile-centric company to one that supplies the total communications needs of its customers. In addition to voice services, these needs centre on managing data networks and outsourcing IT applications, such as storage and security, the company explains.
"Vodacom has seen a number of significant changes over the past few months. As we evolve, we've increased the non-voice share of our business and increased the portion of our business coming from high growth markets outside SA. With the intended acquisitions of Gateway Communications and StorTech, announced in August, we have opened up further opportunities in servicing the total communications needs of corporate clients and we have gained footholds in important new markets across Africa," says Uys.
The half-year also saw the completion of Vodacom's R7.5 billion black empowerment transaction.
"Vodacom is committed to meaningful transformation in SA and we were delighted to conclude this major transaction. The YeboYethu public offer, a large component of the transaction, proved hugely popular and was almost three times oversubscribed. We were particularly successful in promoting broad-based ownership, gaining more than 100 000 new shareholders - almost 60% of which had applied for the minimum number of shares," Uys adds.
"We are the market leader in SA and this will always be our home base, but we also need to look elsewhere for growth. The Vodafone transaction announced two weeks ago is an important step forward. Not only do we gain from closer ties with the world's leading mobile communications company, we will also be their exclusive investment vehicle for sub-Saharan Africa. We believe this ensures a bright future for Vodacom."
Frost & Sullivan's Chireka says Vodacom's presence in markets such as DRC and Mozambique, where penetration rates are less than 15%, is expected to sustain growth. “This will balance out the slower growth in South Africa, where only 8.4% growth was realised,” says Chireka.
Chireka notes that single digit subscriber growth in South Africa is expected as the market is nearing saturation point. She says that when this has happened in advanced markets, operators have employed more aggressive strategies to expand their operations to include a wider range of telecoms services, and Vodacom is following the same trend with its purchase of Gateway Communications and moves to offer corporate hosting and data services.
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