Vodacom Group revenue grew 1,6% to R39,5-billion for the quarter ended 31 December 2024, impacted by a stronger rand.
Group service revenue growth accelerated to 11,6% on a normalised basis, while South Africa service revenue growth improved to 3,2%, supported by prepaid.
Egypt grew service revenue 44,3% in local currency, with Egypt financial services revenue up 77,7%. International service revenue increased 1,4% (7% normalised), impacted by rand strength and pressure in Mozambique. Group financial services revenue increased 5,7% (17,2% normalised) to R3,6-billion.
The group transacted $437,7-billion through its mobile money platforms, including Safaricom, over the last 12 months.
Shameel Joosub, Vodacom Group CEO, comments: “Key trends from Vodacom Group’s third quarter results support the confidence we communicated in November last year that the organisation is poised for a stronger second half performance. While currency headwinds continue to impact various markets where we operate, the focused execution of our strategy has resulted in a resilient operational response to the extent that we remain well on track to deliver on our medium-term financial targets.
“Additionally, the recent currency market stability, particularly in Egypt, bodes well for the Group’s performance in the year ahead.”
He adds that the quarter was positively impacted by accelerated growth in South Africa’s prepaid market in addition to another stellar performance in Egypt and Tanzania while network operators in Mozambique, including Vodacom, have been hampered by post-election tensions since October 2024.
“On a normalised basis, which removes the impact of currency fluctuations, group service revenue accelerated to 11,6%, which is comfortably ahead of our stated medium-term target.”
Vodacom has celebrated a number of key milestones, partnering with Orange in DRC to accelerate rural coverage, launching M-Wekeza in Tanzania to make investments more accessible and introducing a cloud-based handset to reduce the cost of smartphone access in South Africa.
“As part of our digital and financial inclusion drive across our footprint, including Safaricom, we serve over 210-million customers with our sights firmly set on connecting the next 100-million Africans to the digital economy,” says Joosub. “Ethiopia, the continent’s second most populous country, is expected to play a significant role in this ambition and is already making impressive progress with our customer base increasing 63,6% to 7,1-million.”
He adds that the group is on track to reach its medium-term target of a 25% to 30% contribution to group service revenue from what is now called beyond mobile services. Previously billed as “new services”, beyond mobile encompasses digital and financial services, fixed and IoT and now makes up 21,4% of the group total having delivered R6,6-billion in service revenue in the quarter.
“Our financial services business, a clear strategic priority for the group and the largest contributor to beyond mobile, has seen the value of mobile money transactions facilitated by our platforms increase 19,1% in US dollars,” Joosub says. “We now process an impressive $1,2-billion a day. This highlights the scale of this business and solidifies our position as Africa’s largest mobile money platform by transaction value processed.,
Excluding Safaricom, the Group generated R3,6-billion in service revenue in the quarter, up 5,7% or 17.2% on a normalised basis.
The improved Vodacom South Africa performance was underpinned by a variety of factors including successful seasonal campaigns, improved consumer environment in the prepaid segment and a 40,6% increase in data traffic, Joosub says.
“Service revenue from beyond mobile was another highlight, increasing by 11,3% and contributing R2,8-billion to South Africa’s total of R16,2-billion. Having invested R3,2-billion in the quarter, we expect to invest between R11-billion and R11,2-billion of capital expenditure in the current financial year to further enhance customer experience.
“Egypt’s strong performance was largely led by clear NPS leadership,” he adds. “Commercial momentum was strong in Egypt, with a 40,7% increase in financial services customers to 10,5-million and a 25,6% improvement in data traffic. With service revenue of R6,8-billion, Egypt now accounts for 22,3% of the group’s total, closing the quarter with 50,7-million customers, up 6,2%.”
Across Vodacom’s International business, DRC delivered high single-digit US dollar growth and Tanzania continued to deliver good local currency results, while normalised M-Pesa and data revenue growth was strong at 10,2% and 15,4% respectively.
“Our International business customer base reached 58,4-million, up 8,6%, supported by strong commercial execution and a further R1,4-billion network investment in the quarter.
“Data traffic grew by 31,1% while smartphone users were up 1,5-million in the quarter to reach 19-million, as we look to accelerate smartphone penetration with innovative financing options, including a new daily repayment model. While we remain hopeful that the conflict in DRC will reach a resolution, our immediate focus is to safeguard our people, extend relief through our foundation’s initiatives, and ensure that our customers stay connected.”
From a mergers and acquisitions perspective, Vodacom has appealed the decision handed down by the Competition Tribunal in October regarding the proposed acquisition of a joint control stake in South African fibre operator Maziv.
“We remain firmly of the view that this transaction will accelerate fibre reach in South Africa, fostering economic development and helping bridge South Africa’s digital divide,” Joosub says. “Looking ahead, the continued execution of our strategy has the potential to create immense economic value in the markets where we operate, which in turn will help address inequality. In particular, we will continue to drive access to smartphones, financial services, healthcare and education to every person across our markets.”