Vodacom Group added 2,5-million customers during the quarter ended 30 June 2018 – 1,5-million in South Africa and 1-million in its international operations, to reach 76,5-million customers; up 10,3% year on year.
Group data revenue increased 9,9%, with international data revenue, excluding currency translation effects, up 14,7% and South Africa service revenue up 4,9% to R13,8-billion.
M-Pesa revenue growth for the period, excluding currency translation effects, was 23,8%.
Shameel Joosub, Vodacom group CEO comments: “The strong momentum from our annual results has carried Vodacom into a pleasing first quarter. Group revenue and service revenue increased 5%* and 5,2% respectively. We were delighted to add 2,5-million customers over the quarter, reaching 76,5-million across the group, excluding Safaricom.
“In South Africa, despite a tougher economic environment, we grew service revenue by 4,9%, supported by customer growth of 9,5% to reach 43,1-million customers. This was driven by our big data-led innovations, which contributed to robust demand for personalised bundles, offering customers better value for money.
“We sold over 600-million bundles this quarter resulting in an effective price reduction of 10% on voice minutes and 17% for data megabytes. This is evidence of our commitment to lowering the cost to communicate.
“We have also launched some exciting consumer propositions, including our new Vodacom Ticket, which allows customers to save up to 50% on data for social media, video, music and gaming. Data revenue grew close to 10%, a pleasing performance off a bigger base, contributing more than 44% to service revenue.”
Joosub adds that the group remains remain focused on network investment as a key competitive differentiator, expanding its 4G coverage to 81,5% up from 75,9% a year ago.
“Looking ahead, we expect the implementation of the ICASA End-user Subscriber Charter Regulations, in relation to out-of-bundle usage, to have a modest impact on data revenue growth. We expect this to be mitigated in the short term by continued uptake of data bundles and strong elasticity in demand for these services.
“We are encouraged by the improved performance in our international business. We will continue to strengthen our customer value proposition across all operations as a leading digital company.”
In South Africa, service revenue increased 4,9% to R13,8-billion, supported by the improvement in customer revenue growth trends, despite a subdued macroeconomic and consumer spending environment.
Customers increased 9,5% reaching 43,1-million, after adding 1,4-million prepaid customers and 75 000 net contract additions.
Prepaid customer revenue growth was 5,5%, supported by continued strong customer growth of 10%, which was slightly offset by lower ARPUs as we attract new customers with lower spend levels, on average, than the current base.
Contract customer revenue growth has recovered from declines in previous quarters, to grow at 0,8%. The growth was supported by improved performance in the enterprise segment, reflecting customer and ARPU gains from recent contract sign ups and improved usage.
Overall contract customers increased by 5,9%, while contract ARPU declined 2,3%.
Voice revenue declined at 2,6%.
Data revenue grew 9,4% to R6,1-billion, contributing 44,1% (2018: 42,2%) of service revenue. An additional 739 000 4G customers were added in the quarter, bringing the total to 8,1-million customers.
Fixed-line revenue growth was 22%, while Internet of Things (IoT) connections increased 25,2% to 3,90million.
“We spent R2-billion on capital expenditure, focusing on new sites, upgrades and capacity to improve network quality and performance,” Joosub says. “These efforts have resulted in Vodacom leading in data speed benchmarks. This also allowed us to expand our 4G coverage to 81,5%, up from 75,9% a year ago. We also expanded our rural coverage and made progress to improve backhaul performance and capacity by increasing the proportion of self-provided high capacity sites from 90,1% a year ago to 92,4%.