Vodacom profits beat Vodafone UK
Vodafone‘s biggest asset in Africa, Vodacom Group, is bringing in a bigger profit than the mobile network giant’s UK operations.
According to Vodafone’s annual report in 2012, Vodacom is shown as a formidable profit powerhouse, trumping Vodafone UK’s profit margin by almost £500 million.
But while Vodacom – Vodafone’s biggest asset in Africa – competes well against the company’s European operations, the general Middle-East and Africa (MEA) region is still dwarfed by Vodafone’s operations in Europe.
Globally, Vodafone serves in excess of 407 million customers, with Vodacom Group accounting for more than 50 million of those subscribers.
Speaking to Bloomberg, Vodafone MEA head, Nick Read, said that profit from Africa could overtake that from all of southern Europe in as little as three years, noting that earnings in Africa were expanding 50%, annually, in some countries.
“There’s a massive opportunity in penetration that we need to drive forward on,” Read told Bloomberg.
“Everyone in Africa wants to be on Facebook. They want e-mail. They want social networks.”
Africa will be the mobile phone industry’s fastest-growing region by subscribers over the next five years as companies build advanced networks and customers switch to broadband, according to the report.
In comparison, in November 2012, Vodafone wrote down the value of its businesses in Spain and Italy by as much as £5.9 billion
| Region | Operating profit (£m) |
| Europe | 5,726 |
| EMEA | 1,272 |
| Other | 4,820 |
| Total | 11,818 |
Operating profit from the European region
| Country | 2011 (£m) | 2010 (£m) | % Change |
| Italy | 1,903 | 2,107 | -9.68 |
| Germany | 1,548 | 1,695 | -8.67 |
| Other | 1,012 | 1,084 | -6.64 |
| Spain | 915 | 1,310 | -30.15 |
| UK | 348 | 155 | 124.51 |
Operating profit from the MEA region
| Country | 2011 (£m) | 2010 (£m) | % Change |
| Vodacom | 827 | 520 | 59.03 |
| Other | 430 | 335 | 28.35 |
| India | 15 | -37 | – |
Vodacom in Africa
In November 2012, Vodacom reported an 8.4% rise in revenue for the six months ended September 2012, to R34.43 billion.
This was spurred on by the continued strong demand for data services and further voice penetration growth in its international operations, the group said.
Service revenue jumped to R29.68 billion, from R27.75 billion in the same period in 2011, with operating profit rising to R8.97 billion, from R7.3 billion.
Vodacom highlighted an operating profit margin of 26.1%, from 23% before.
Speaking to BusinessTech after the reporting, Vodacom CEO Shameel Joosub divulged the company’s plans to further expand and tap into the lucrative Afrian market.
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.
Additional sources: Bloomberg, Vodafone
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