Vodacom Group has reported service revenue up 6,1% to R36,8-billion; and group revenue up 5,6% to R44,4-billion for the first six months of the financial year..
The telco added 4,8-million customers in the six months, up 10,7%, comprising 2,5-million in South Africa and 2,3-million in its international operations. Safaricom added 373 000 customers.
With all operations combines, the group can now serve over 109-million customers.
South Africa service revenue increased 4,6% to R27,9-billion, supported by strong customer growth. International operations service revenue growth accelerated to 12,8%, boosted by strong growth in data and M-Pesa.
Group EBIT improved 3,4% to R11,2-billion, with strong improvement in international operations.
Significant capital investment of R5,3-billion was made to expand coverage and improve the quality of Vodacom’s networks.
During the period, Vodacom Lesotho became the first operator to launch a commercial 5G network in Africa.
Vodacom also concluded its new broad-based black economic empowerment (BEE) ownership deal, the largest deal of its kind in the ICT sector.
Shameel Joosub Vodacom Group CEO, comments: “Following on from last year’s extraordinary year for Vodacom, we delivered two strategic milestones during the first half of this year. In September, we concluded our second BEE transaction under the YeboYethu umbrella to replace the highly successful R7,5-billion deal launched in 2008.
“Valued at R16,4-billion, the new scheme is the biggest ever in the telecommunications industry in South Africa and makes YeboYethu our third largest shareholder,” he adds.
“As expected, the costs associated with this transaction had a once-off impact on headline earnings per share. Excluding the charges relating to the BEE transaction and contribution from Safaricom, HEPS rose 6%. To facilitate the new BEE structure, we issued an additional 114.5 million shares yet increased our interim dividend to 395cps.
“In September, Vodacom Lesotho became the first company to commercially launch 5G on the African continent,” Joosub says. “This makes Vodacom Lesotho amongst the first in the world to lay claim to this innovation, paving the way for our other operations to follow suit once we secure the requisite spectrum.
“Over 5-million customers joined the Vodacom and Safaricom networks, increasing the combined customer base to 109-million. This shows that our strategy of sustained and targeted investment in customer and network experience across our operations is delivering strong results, contributing to the 5,8% growth in service revenue across the group.”:
Joosub adds: “In South Africa, underlying growth has weakened as the country’s economic slowdown increasingly weighs on consumer spending in the market. Still, service revenue rose 4,6% as anticipatory measures driven by the use of big data machine learning in more areas of the business has contributed to countering some of these pressures.
“The 2,5-million increase in customers in South Africa since March, shows that our sustained effort to deliver greater value is working across prepaid and contract and is evidence that our personalisation through big data is delivering results.”
Vodacom invested R4-billion in South Africa alone in the past six months and, at the same time, reduced effective voice and data prices by 8,5% and 16,4% respectively. “We continue to accelerate our rural coverage expansion programme to bridge the digital divide and will prioritise an additional 200 villages this year to add to the 101 communities that we connected during the first quarter of this year,” Joosub says.
“Mozambique produced an excellent performance while the momentum from our commercial actions in Tanzania and DRC last year continues to gather pace. This contributed to the strong performance in our International portfolio where normalised service revenue grew 11,4%, led by rising customer numbers, accelerating demand for data and improved growth in M-Pesa.”
The contribution to the group by its mobile money platform continues to improve, Joosub says. “The combined customer base, including Safaricom, grew 13,7% to 34,2-million. In our international operations, we processed M-Pesa transactions worth $14-billion, supporting a 25,2% increase in revenue to R1,4-billion. M-Pesa now supports 21-million Safaricom customers, an increase of 8,8%, and M-Pesa now constitutes nearly one-third of its service revenues.
“Our strategic investment in Safaricom, concluded in the previous financial year, is exceeding our expectations having contributed R1,4-billion to the Vodacom Group’s operating profit. Safaricom reported a 7,7% increase in service revenue and an 18,7% rise in EBIT.”
Looking ahead, Joosub says the relative economic and currency stability in most of the group’s international markets is pleasing and it will continue to invest heavily in our networks, artificial intelligence and big data analytics to drive financial inclusion, further enhance customer experience and progress Vodacom’s digital telco strategy.
“I am pleased that Telkom has selected Vodacom as its new roaming partner, and we look forward to delivery on this long-term mutually beneficial agreement,” he adds. “Apart from the commercial benefit, this partnership will also result in cost savings for Vodacom.
“Efforts to reduce the cost to communicate are contingent on having access to the right spectrum at reasonable market-related prices. While we are encouraged by the significant progress in recent times regarding the licensing of 4G spectrum in South Africa, there are still a number of areas of concern with the current draft Electronic Communications Act as well as inconsistencies in the proposed policy and policy directions to ICASA on licensing unassigned high demand spectrum. We remain committed to engaging with relevant stakeholders to find a suitable outcome to move South Africa forward.”