Mobile operator Vodacom will accelerate its long-term evolution (LTE) investment rollout, and its entire network will be LTE-ready by the end of August.
The group, which this morning released its results for the year to March, aims to more than double its LTE sites, from almost 1 000, by the end of next March, CEO Shameel Joosub said during a conference call.
Vodacom, SA's largest network with 33 million subscribers, is ramping up its capital spending over the next three years as data growth gains 80% in the local market. CFO Ivan Dittrich says Vodacom has approved a three-year capital expenditure programme and, this year, will invest R13 billion, the bulk of which - at R9 billion - will go into its local operations. This is a 20% gain year-on-year.
Dittrich says capital expenditure will be between 14% and 17% of revenue, and towards the high end of this mark for the first year before tapering down. However, Joosub notes its network investment will be informed by the final outcome of the mobile termination rate process.
At the end of March, South Gauteng High Court judge Haseena Mayat ruled the rate would be 20c (half of that charged in 2013) for terminating calls on Vodacom and MTN's networks, while Cell C and Telkom Mobile can charge the two 44c to terminate calls on theirs, until October. After that, the Independent Communications Authority of SA must implement new rates.
Locally, the company aims to take its 3G coverage from 92% to almost 100%, as well as accelerate its LTE rollout and push fibre-to-the-home on a larger scale, explains Dittrich. He says its international spending - around 30% of its capital allocation - will go into low-cost rural sites.
Vodacom's R7 billion bid for Neotel is expected to accelerate its ability to roll out more services as, should the deal pass regulatory muster, Neotel will add valuable spectrum and about 15 000km of fibre to Vodacom's infrastructure.
Dittrich says, in the meantime, it will be business as usual for both companies as the regulatory approval process gets under way. He adds the group has enough balance sheet capacity to fund the deal.
Data driver
Overall revenue has surpassed the R75 billion mark for the first time, as data continued to be increasingly used, says Dittrich. The company reported data users up 21% to around 41% of its customer base, he noted.
Service revenue - the income Vodacom earns from network services, gained 3.7% when exchange fluctuations are stripped out. The bulk of this growth was from its international operations, which now account for 15.6% of group earnings before interest, tax, depreciation and amortisation.
Dittrich says data revenue gained 32.7% - to 24.1% of service revenue - as traffic grew 94%. Locally, data was the key driver behind gains in its service revenue, which improved 0.3%; reversing last year's contraction.
South African data subscribers gained 11.9%, to just more than half its base, as devices on the data network gained to 7.8 million, says Dittrich. He notes the company continued to invest in coverage and capacity in SA, and its 3G base stations now cover 92% of the population, while it self-provisions to three-quarters of its sites.
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