Vodacom Group reported a 2.7% drop in service revenue to R47 billion for its South African operation during the year ended March 2015, impacted by a 50% cut in mobile termination rates (MTRs).<\/p>\n
Excluding the MTR impact of R2.0 billion in April 2014, service revenue grew 1.5% and returned to growth in Q4, Vodacom said.<\/p>\n
Group revenue increased by 2.1% to R77.333 billion and service revenue by 0.2% to R62.167 billion.<\/p>\n
Group operating profit declined to R19.2 billion, from R20.4 billion before.<\/p>\n
Group active customers for the group however, increased 7.2% to 61.6 million, with group revenue up 2.1% and service revenue up marginally (0.2%).<\/p>\n
In South Africa, prepaid active customers increased 1.8% to 27.2 million customers, while contract active customers, excluding M2M, increased 2.5% to 4.9 million.<\/p>\n
Group headline earnings per share decreased 4.0% to 860 cents and the group reported a final dividend of 400 cents, taking the total dividend to 775 cents in line with its dividend policy.<\/p>\n
Capital expenditure increased 23.4% to R13.305 billion representing 17.2% of group revenue. In SA, capex grew 26.1% to R8.646 billion.<\/p>\n
Shameel Joosub, Vodacom Group CEO said: “The key highlights of our story for the year were network investment, data growth, and pricing transformation. This played out against a tough backdrop. In South Africa we faced major cuts in mobile termination rates, a weak economic environment, exchange rate volatility and increased price competition.”<\/p>\n
“In South Africa we’ve attracted the majority of contract customers to integrated packages and established the value bundle approach within the prepaid segment, which has in effect rebased our pricing.”<\/p>\n
” This resulted in a 17.7% reduction in the blended average effective price per minute for calls, and a 24.1% reduction in the average effective price per MB of data.”<\/p>\n
“A second significant change was the 50% reduction in MTRs which was a major contributor to the 2.7% decline in service revenue in South Africa.”<\/p>\n
Joosub said that the group has 26.5 million active data customers and 1.8 million machine to machine (‘M2M’) customers. Overall data revenue grew 25.0%.<\/p>\n
“In South Africa, the number of smart data devices (smartphones, tablets and modems) active on the network grew by 29.7% to 11.6 million, boosted by the launch of Smart Kicka and Smart Tab, Vodacom’s low-cost branded devices,” the group chief said.<\/p>\n
Vodacom added an additional 2,576 3G sites across the group and more than doubled its LTE\/4G sites to 2,610. In South Africa, 3G coverage was extended to 95.6% of the population.<\/p>\n
In SA, data revenue grew 23.4% to R13.538 billion. The number of active smart data devices on the network increased 29.7% to 11.6 million (of which 9.3 million are smartphones, 1.1 million are tablets and 1.2 million are modems), fuelled by more affordable devices.<\/p>\n
The average amount of data used per month increased 37.9% to 342 MB on smartphones and 12.3% to 829 MB on tablets.<\/p>\n
“Looking forward, the improvement in fourth-quarter performance gives us cause for cautious optimism. The indications are that we’ve pulled through a transformative period and conditions over the medium-term look more favourable,” Joosub said.<\/p>\n
“With the significant impact of lower mobile termination rates in South Africa behind us (interconnect revenue now contributes less than 5% of service revenue), the impact going
\nforward of further reductions in MTRs will be significantly less,” Vodacom said.<\/p>\n
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