Vodacom has reported revenue and customer increases, according to preliminary results for the year ended 31 March 2014.

Shameel Aziz Joosub, Vodacom group CEO, comments: “Vodacom again performed well this year with good results from our International operations and South Africa returning to growth. Demand for mobile data continues to be a key growth driver.

“Overall revenue grew 8,3% and we added 7-million customers in the year taking our total active customer base to 57.5-million.

“In South Africa, service revenue grew 0,3%, an improvement on last year’s contraction. Excluding lower mobile termination rates (MTRs), service revenue grew 3%. Our active customer base increased 8% to 31,5-million.

“We continue to take major steps to reduce the cost to communicate, bringing down both our prepaid average effective price per minute by 23,6% to 55 cents and our average effective price per megabyte of data by 24,8% in the year.

“Data traffic in South Africa increased 80,4% in comparison to last year. The number of smartphones and tablets on the network increased 23.5% to 7.8-million supported by our attractive device financing offers, with average monthly data usage at 253Mb and 743Mb respectively.

“Service revenue from our international operations grew by 23,4% and the active customer base increased 21,8% to 26-million. EBITDA grew by 55,4% with margin expanding by 6 percentage points to 29,6%.

“Data revenue more than doubled and the number of active data customers increased 86,4% to 7,7-million, driven by our attractive data bundles.

“Mobile financial services are also a strong growth driver with M-Pesa now contributing 18,8% to service revenue in Tanzania.”

Joosub adds that network investment is the key to continued sustainable reductions in the cost to communicate. “In South Africa we invested R6,9-billion in our network, adding 1 081 new 3G sites. Our 3G network now covers 91,9% of the population. We invested a further R3,9-billion in our International operations’ networks, increasing the number of 2G sites by 25,5% and 3G sites by more than 53,4%.

“Looking forward, we intend to increase capital investment by around 20% to approximately R13-billion in the new financial year as part of our massive investment programme. This will be informed by the final outcome of the MTRs. By building on our leading network position, we can accelerate growth and unlock new opportunities.”

In the South African operation, revenue increased 5,5% to R61,806-billion driven by a 28,6% growth in equipment revenue which represents 20,3% of total revenue. The strong growth in equipment revenue was supported by our device financing programme which underpins our strategy of making data capable devices affordable for more of our customers.

Service revenue grew 0,3% to R48,316-billion. Excluding the impact of lower MTRs which resulted in a 21,7% decline in interconnect revenue, service revenue increased 3%. The return to service revenue growth is mainly due to higher data revenue growth of 23.,6% which offset a 3,5% decline in voice revenue.

Other service revenue grew 23% to R2,684-billion. This increase was primarily due to growth in business managed service revenue of 45.0% which underscores the growing significance of the enterprise segment.

Data revenue increased 23,6% to R10,974-billion and now represents 22,7% of service revenue. The continued reduction in the effective price per megabyte of 24,8% attracted new users and increased usage across the base. The company achieved 11,9% growth in active data customers to 16,1-million customers and data traffic increased 80,4%.

Data revenue growth was further supported by a 23,5% increase in the number of active smartphones and tablets to 7,8-million devices. The average monthly data usage on smartphones increased 81,7% to 253Mb per device and increased 25,2% to 743Mb on tablets.

Customer service revenue grew 2,3% to R41,334-billion driven by a 5% increase in prepaid customer revenue. Contract customer revenue remained stable year-on-year.

Active prepaid customers grew 9,5%, adding 2,3-million net connections, to 26,7-million customers. New price plans and targeted promotions led to a 23,6% decline in the effective prepaid price per minute to 55 cents and a 29,2% increase in prepaid outgoing traffic.

Active contract customer were flat at 4,8-million. Contract customer ARPU declined 3,5% to R389 per month as customers were migrated from voice centric plans to integrated price plans which include voice, messaging and data allocations – 56,3% of contract customers (excluding Top Up) are now on the integrated plans, with in-bundle spend of 64,6%.

For the Top Up segment, Vodacom launched the uChoose plan which gives customers access to integrated plans and an option to have access to prepaid promotions on an ad hoc basis. The initial take up has been strong – 59,2% of new Top Up connections were uChoose packages since launching in the second half of the year.

EBITDA grew 3% to R23,087-billion with an EBITDA margin of 37,4%. The EBITDA margin contracted by 0.8 ppts primarily as a result of the higher contribution from low margin equipment sales. We maintained a flat operating expenditure to service revenue ratio despite increased costs from expenses not billed in South African rand and inflation increase in wages, fuel and electricity.

Capital investment of R6,858-billion was mainly directed toward expanding the reach of the data network and to increase network capacity and resilience. Vodacom rolled out 1 081 3G sites increasing data coverage to 91,9% of the population. The company also added 598 2G sites to improve voice capacity. It now has 916 LTE sites and 73,6% of all sites are now connected to self-provided high-speed transmission.

International service revenue grew 23,4%. Data revenue grew 105,2% driven by an 86.4% growth in active data customers to 7,7-million; 29,6% of the active customer base is now using data. Mobile financial services continue to grow well with M-Pesa customers increasing 21,6% to 6-million.

International operations’ EBITDA is up 55,4% to R4,256-billion. International operations’ contribution to Group EBITDA increased to 15,6%.