We’ve cracked Africa model: Vodacom

Vodacom CEO, Shameel Joosub believes that the group has “cracked the Africa model” and is ready for a more aggressive assault on the continent.

Shares in Vodacom closed at an all-time high on the JSE on Monday, up 4.95% or R5.49 to R116.39 after the group reported a 36.5% rise in service revenue for its international operation to R5.99 billion, and lifted its interim dividend per share by 36.5%, to 355 cents.

Group active customers also grew as much as 20.8%, to 50.1 million.

Out of total revenue of R34.43 billion for the six months ended September 2012, international operations now account for 20.2%, from the 16.9% in 2011.

Data revenue grew 140.7%, supported by 128.0% growth in active data customers to 4.3 million.

According to Joosub, “the International operations have reached a critical turning point in terms of profitability, EBITDA increased 92.3% to R1.269 billion and the EBITDA margin grew by 6.0 pts to 20.6%, as we started to realise scale benefits from significant revenue growth.”

The company chief also highlighted a substantial increase in capital investment in its international divisions, up 130.4% to R1.023 billion, or 16.6% of revenue.

The Group sold its investments, supplier agreements and assets in Gateway Carrier Services, which formed part of Vodacom’s International reportable segment, for US$35 million. The sale became effective on 31 August.

Looking ahead, Joosub said that Vodacom would adopt a two pronged approach in Africa, namely, to continue to drive further penetration within the markets it is currently in, and seek new opportunities “more proactively” outside its current operations.

Aside from its headquarters in South Africa, Vodacom has additional networks in Tanzania, the Democratic Republic of Congo, Mozambique and Lesotho, but it is dwarfed by rival MTN Group, which has operations in 21 countries in Africa and the Middle East.

“We are looking at opportunities in Africa, we believe we’ve cracked the Africa model now,” Joosub said, but he remained tight-lipped on exactly where those potential opportunities were.

The chief executive highlighted the success of it mobile financial service M-Pesa, with active customers almost doubling compared to the previous period to 4.2 million customers in the reporting period.

“With 47.1% of Tanzania’s customer base actively using M-Pesa, the service now contributes 12.6% to Tanzania’s service revenue, up considerably from 6.9 % a year ago. Building on this success, similar money transfer services will be rolled out in the DRC, Mozambique and Lesotho in the next nine months,”  he said.

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We’ve cracked Africa model: Vodacom