Smartphones going mainstream
In the six months between April and September, Vodacom has added a staggering 870 000 smartphones (net) to its network. The gross number would be higher, as many users would be replacing old smartphones with new models.
As of September, Vodacom had 4.1m smartphone customers in South Africa. CEO Pieter Uys revealed Monday that there are roughly 1.5m BlackBerrys, 200 000 iPhones and 200 000 Android phones on its network. This means that there are still 2m “older” smartphones, the majority are likely Nokia E-series and N-series phones.
These numbers are surprising. Vodacom saw net additions of 2.4m customers in the first-half, which means that nearly 40% of those customers bought smartphones. This is double the amount from a year ago (20%). Also surprising is the Android figure.
With the sheer number of phones on the market from device makers like HTC, Samsung, Sony Ericsson and Motorola, one would’ve thought the 200 000 number would’ve been higher.
Add in Vodacom’s entry level Android smartphone Vodafone 858 Smart, which retails for R999 cash, and that number looks even more surprising.
BlackBerry, iPhone and Android devices on Vodacom network
The BlackBerry number isn’t at all surprising, given that high-level sources confirm that in some stores, four out of every five phones sold are BlackBerrys. The attraction with BlackBerry is the fixed R59 per month subscription which gives you access to unlimited internet browsing, e-mail and BlackBerry Messenger (BBM). This has meant BlackBerrys are especially popular among the youth and lower LSM markets.
It’s no secret that operators including Vodacom are working on data plans for other smartphones, similar to the all-you-can-eat approach from BlackBerry. What is a secret is that other major device makers are also working on “fixed and predictable” data pricing.
Vodacom is not just seeing massive growth in smartphones. It’s also seeing big increases in overall (and regular) active data users. In South Africa, it grew active data subscribers (active for one month) by 32% from last year to 10.5m. Customers regularly buying data bundles nearly doubled to 3.5m.
The bulk of data traffic on its network is still generated by 3G modems (dongles). However, Vodacom says the “growth rate of smartphone data traffic is ten times that of” the rest.
Average monthly usage on dongles is 500MB which is most likely a result of the majority of these users being on corporate subscriptions.
Across its network, Vodacom sees an average monthly usage of 80MB for smartphones (compared to a quarter of that on feature phones). Data ARPU (average revenue per user) is not as high for iPhone and Android users as you’d think. Especially not when compared to the effective R59 per month data ARPU for BlackBerry.
Investing in its network has become critical with this additional demand for data. It sees an acceleration in the second half to enable it to achieve the full year target of R7.7bn (it only spent R3.462 in these six months). The bulk of this spending is in South Africa (only R444m in international operations).
Vodacom added 352 new 3G sites in SA, and at the end of September had a total of 4 642. In the past six months, Vodacom has also halved the number of 3G sites running at full capacity (from 10% of the total to 5%).
More than 3 700 base stations are self-provided (running on Vodacom’s own network). This means Vodacom is increasingly not reliant on backhaul transmission links from Telkom. And it’s critical for efforts to drive down prices, ensure higher broadband speeds and for new technologies such as LTE (long-term evolution, popularly termed “4G”).
Source: Moneyweb
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