Vodacom has reported group revenue up 1,5% (0,7%) to R23-billion and service revenue up 2,4% (1,6%) to R18,9-billion for the quarter ended 31 December 2018.
Group customers increased 7,1% to 79-million, up 5,4% in South Africa and 9,3% in international operations.
Group data revenue increased 2,2% to R6,8-billion, while international data revenue grew 25,4%.
In South Africa, revenue declined 0,9% to R13,9-billion, impacted by pricing transformation and customers optimising promotional data bundle allocations.
Strong commercial execution saw international service revenue increase 13,2% to R5,2-billion.
Shameel Joosub, Vodacom Group CEO, comments that the South African service revenue declined of 0,9% was impacted by customers optimising promotional data as part of the company’s Summer campaign and a subdued consumer spending environment.
The local market also saw a revenue fall of 1,3% following lower growth in equipment revenue, with device sales negatively impacted by the weaker rand against the US dollar.
However, South African customer numbers were up 5,4%.
Prepaid customer growth was resilient, while efforts to reduce once-off use of SIM cards started to take effect, resulting in lower gross additions in the quarter.
During the period, Vodacom gained 86 000 contract customers, bringing the total to 5,6-million, up 5,7% year-on-year, supported by gains in both the consumer and enterprise segments.
Contract customer service revenue in South Africa was down 2.,%, impacted by reduced out-of-bundle data spend, as well as customers continuing to migrate to more inclusive value contracts as part of Vodacom’s pricing transformation strategy. A weaker economic environment has also see more customers selecting lower-value packages.
Prepaid customer service revenue grew 0,8%, lower than the previous quarters, with increased number of customer opting for lower priced bundles with shorter validity periods, especially in data.
Voice revenue remained resilient, declining by only 0,5%, stimulated by strong demand supported by Vodacom’s Airtime Advance product, which makes it easier to buy airtime when a customer is not close to traditional channels.
Data revenue was flat on the prior year, as customers used data rewards from our Summer campaign to offset their usual spend. However, utilization remains strong, with data traffic up 41,4%.
Active smart devices on the network were up 13,3% to 20,2-million, with average igabytes per smart device increasing by 31,9% to 1,1GB.
4G customers increased 40,5% to 9,2-million.
Vodacom sold 209-million data bundles during the quarter.
The group’s platform strategy, designed to stimulate reasons to consume data, is gaining momentum. The Videoplay platform now has over 700 000 active users paying for services, and the recently-launched music platform, Muze, is steadily gaining customers, Joosub says.
Fixed line service revenue grew 11,3% with strong growth in wholesale transit revenue. Internet of Things (IoT) connections increased 24% to 4,3-million.
Vodacom also began the process of migration between Cell C and Telkom roaming on its network and is expecting increased traffic from Telkom to start offsetting the reduced Cell C traffic within the next couple of quarters.
During this quarter, capital expenditure spend of R2,6-billion was focused on increasing our network coverage and enhancing IT systems. The data network is believed to now reach 99,5% of the population on 3G and 90% on 4G.