Vodacom SA customers flattening out

Vodacom on Thursday (18 July) reported a 5.3% rise in active customers to 51.5 million, as international operations continued to expand their coverage.

However, in South Africa the group noted that its customer numbers declined 2.3% year-on-year to 29.282 million, from 29.971  million in 2012. On a quarterly basis, customer numbers improved 0.3% to 29.190 million.

In a trading statement for the quarter ended June 2013, Vodacom said that group revenue increased 3.0% to R17.536 billion. boosted by the strong growth in equipment revenue in South Africa.

Group service revenue was up 2.3% to R14.636 billion due to the 28.2% growth in data revenue and the 1.6% growth in voice revenue, partially offset by the 14.6% decline in mobile incoming revenue.

In South Africa, revenue increased 3.9% to R14.549 billion; however, service revenue decreased 0.2% to R11.678 billion, with a 23.5% decrease in mobile incoming revenue from MTR cuts offset by the growth in mobile customer revenue of 2.5%.

Vodacom revenue
Vodacom revenue

The first quarter service revenue decline of 0.2% is an improvement from the 2.0%
decline reported in the fourth quarter last year. This, Vodacom said, is primarily due to the better performance of voice revenue.

ARPU declined 0.8% year on year to R125 (vs. 9.3% decline in Q4 2013), impacted mainly by the MTR cut, the group said.

Shameel Joosub, Vodacom Group CEO said: “Vodacom continues to perform well. We’ve seen a substantial increase in traffic as a direct result of executing on our commercial
strategy and launching new products across all of our operations.”

“As an example, by focusing on value offerings that allow people to talk for longer, we’ve grown prepaid minutes of use by 21.0% in South Africa.”

“Overall, the active customer base has increased 5.3% to 51.5 million and Group revenue from on-going operations, adjusted for foreign exchange, increased 5.1%,” he said.

Shameel Joosub
Shameel Joosub

“Data and the International operations remain key parts of the growth story. Data revenue in South Africa increased 21.8% and now accounts for 21.3% of service revenue, up from 17.5% a year ago.”

“Continued network investment supported the increase in data traffic in South Africa, with 1.3 million additional smartphones active and using on average 75% more data per device than a year ago,” Joosub said.

Joosub highlighted growth in equipment sales, primarily smartphones and tablets, which totalled R2.7 billion in the quarter.

International operations added just under 3.3 million customers over the last twelve months, with service revenue increasing 14.1%.

Vodacom active customers
Vodacom active customers

M-Pesa

Mobile financial services also continue to grow, with active M-Pesa customers up 44.9% to 5.2 million and revenue increasing by 102.8%.

Vodacom said that in Tanzania 53.4% of the customer base is actively using M-Pesa, the service now contributes 18.2% of service revenue, up from 12.3% a year ago. M-Pesa generated an incremental ARPU of $2 in Tanzania in the quarter.

“M-Pesa again performed well in Tanzania and has now been launched in Mozambique, DRC and Lesotho,” Joosub said.

At close of play on Wednesday, shares in Vodacom gained R3.83 or 3.49% to R113.50, up 25% over the past year, but off its best of R129.88.

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Vodacom SA customers flattening out