Vodacom profit boosted by 3 million new customers in SA
Vodacom’s South African operation, on Monday, reported a 5.6% jump in service revenue for the year ended March 2017, to R52.1 billion, driven by strong customer additions, with good progress on data and enterprise services.
Local revenue grew by 3.9% to R64.73 billion, hampered by the equipment revenue decline of 4.0%, the operator said. This was mainly due to slightly lower device sales, which was impacted by the weakening of the rand against the US dollar and Euro for most of the year.
Customers increased by 8.6% to 37.1 million, with 3.0 million customer net additions, as our segmentation and bundle strategy continued to attract new customers, South Africa’s largest mobile operator said.
Prepaid customers reached 32.0 million, up 9.3%, while the company added 218,000 contract customers during the year.
Data revenue grew 19.7% to R20.696 billion, which now comprises 39.7% of service revenue. As the strong demand for data continues, underlying drivers of growth remain strong with data customers up 8.3% to 19.5 million and data traffic up 43.2%, Vodacom said.
It said that 4G customers increased 86.7% to 5.1 million, while the average monthly data usage on smartphones increased 25% to 560MB.
“Our data bundles sales grew by 44.8% to 495 million resulting in the reduction in the effective price per MB by 16%,” Vodacom said.
Additional highlights:
- SA capital expenditure of R8.471 billion vs total expenditure of R11.29 billion
- South Africa operating profit up 5.3% to R20.238 billion
- Overall revenue increased 1.5% to R81.3 billion
- Headline earnings per share (HEPS) up 4.5% to 923 cents per share
- 4G coverage increased to 75.8% of the population, up from 58.2% a year ago reaching over 7,900 sites.
- Final dividend per share of 435 cents, taking the total dividend to 830 cents per share for the year
International
Service revenue declined 5.6% to R16.8 billion, impacted by exchange rate volatility and the anticipated effect of the disconnection of customers, most notably in the prior year, in compliance with customer registration requirements in DRC, Mozambique and Tanzania.
“Short-term pressure remains, with signs of improvement in Tanzania, very strong execution in Mozambique and Lesotho, but a challenging macro environment in the DRC,” Vodacom said.
Customers increased 9.3% to 29.7 million as the international operations have returned to positive net additions of 2.5 million in the year.
Data revenue grew 2.3% to R4.113 billion driven by a 29.3% increase in data customers to 13 million, the company said.
Shameel Joosub, Vodacom Group CEO, said: “A year ago we said that the strategies that we have implemented to differentiate our network experience, to proactively change our pricing and to offer customers more value through segmented and personalised offers, will continue to sustain revenue growth.”
He said that the sustained demand for data remains a key driver for growth with active data users up 8.3% in South Africa and 29.3% across the group’s international operations.
Data now comprises 36.3% (up from 31.9% a year ago) of group service revenue and grew at 16.4%, he said.
“To solidify our network and service differentiation and support this continued growth, we invested R11.3 billion in our infrastructure of which R8.5 billion was in South Africa where
we expanded 4G coverage to 75.8% of the population and 3G to 99.8%.
“Over the past three years, capital expenditure across the group will total at R37.5 billion with R25.9 billion,” Joosub said.
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