Vodacom revenue hit by MTRs
Vodacom reported a 2% decline in service revenue in South Africa, in a quarterly update for the period ended June 2014, due to MTR cuts.
The group said that revenue would have climbed 2%, had the impact of MTRs been excluded. Service revenue for the local operator in SA amounted to R11.4 billion, with overall revenue up 1.7% to R14.8 billion.
Group revenue increased 4.3% to R18.3 billion, while group service revenue increased 1.8% to R14.9 billion, up 5%, excluding cuts in mobile termination rates (MTRs).
Shameel Joosub, Vodacom Group CEO, said that a 50% cut in MTRs in April 2014 led to a 44.0% reduction in incoming voice revenue.
Active prepaid customers in SA grew 13.2% adding 997,000 customers to 27.7 million.
“We achieved 14.3% growth in minutes of use by introducing time based bundles at lower price points to cater for consumers who remain under pressure as a result of a weak
macroeconomic environment,” Joosub said.
Active contract customers were flat at 4.8 million.
Group data revenue increased 23.2% to R3.6 billion, representing 24.1% of service revenue, while group active customers grew 15.6% to 59.6 million and active data customers grew 36.7% to 25.3 million.
“In the past year we’ve added more than eight million new customers, taking our active customer base to just shy of 60 million,” Joosub said.
“In South Africa we executed well, operationally, and grew our customer base by 11%, but revenue was impacted by the dramatic decrease in MTRs.”
“We continued with our price transformation strategy, bringing down the overall effective price per minute by 25.3% to 68 cents and driving an increase in outgoing voice traffic of 26.1%,” he said.
The elasticity effect, the CEO pointed out, was even more notable on data, with a 30.3% reduction in the average effective price per megabyte, offset by a 70.1% increase in data traffic.
The number of active smartphones and tablets on Vodacom’s network in SA increased
19.3% to 8.0 million devices.
The average monthly data usage on smartphones increased 44.5% to 312 MB per device and usage on tablets increased 43% to 848 MB per device, the group said.
Vodacom said it added a further 473 LTE sites in the quarter, an increase of more than 50%.
“On top of this we added another 293 3G sites, and 74.5% of our sites are now connected using our own self-provided high capacity transmission,” Joosub said.
Vodacom highlighted the 51% growth in its M-Pesa service to 6.6 million customers.
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