Vodacom continues strong growth
The Vodacom Group today announced reviewed results for the financial year ended 31 March 2008 that continued its 14-year track record of double-digit growth in all key areas of its business.
“Our on-going growth off such a large base is due to continuous innovation in Vodacom. We are no longer a mobile-centric company and have shown that we can carve our future out of providing services and infrastructure in the larger information communications technology arena. This is especially evident in the fact that Vodacom is now arguably the biggest provider of data services in South Africa,” said CEO Alan Knott-Craig.
For the first time data revenue has contributed more than 10% of the Group’s revenue, increasing by 49.7% to R5 billion.
“As cellphones become more computer-like, it has become the most used business tool in the world by far. Added to the huge demand for all forms of mobile computing, we have grown the data market with affordable data products, better speeds and better quality,” Knott-Craig said.
Vodacom has more than 4.5 million active data customers in South Africa using a wide range of data products and services, including MMS, data card and USB modems, 3G/HSDPA handsets, Vodafone live! and Mobile TV.
“The dearth of transmission capacity poses a threat to the growth of broadband in South Africa. Vodacom is therefore active in a number of international transmission initiatives, such as Seacom, Eassy Cable and Infraco. Once this infrastructure is in place, international bandwidth costs are expected to drop by between 70% and 90%. We also expect the rollout of various optic fibre rings to alleviate the lack of transmission capacity,” Knott-Craig said.
Customer growth in Vodacom’s four African operations continued at rates of between 25% and 41%, contributing one in three of the Group’s new customers.
“With mobile penetration levels at between 12% and 20%, these markets offer Vodacom excellent organic growth potential. At the same time, there is a clear need for data connectivity and data communication in non-South African operations, which contributed R333 million to the Group in the past financial year,” Knott-Craig said.
He said cellular sim card penetration in South Africa was now an estimated 94%, an increase of 10% over the past financial year. People penetration is estimated at between 60% and 70%. Vodacom’s share of this market was 55%, with 24.8 million customers, an increase of 7.9%.
“As the market matures, we are repositioning Vodacom from being a mobile-centric operator to becoming a provider of converged information and communication solutions,” Knott-Craig said.
During the year under review Vodacom announced its intention to build its own transmission capacity to provide such services. The first two fibre optic rings in Gauteng will be completed by 15 June this year. Both these rings are already carrying traffic.
“The resulting economies of scale will generate significant cost savings for customers, as well as improvements in network efficiencies and security,” Knott-Craig said.
During the year under review two Vodacom Earth Stations were completed in Midrand that are now commercially operational and provide direct satellite communications between Vodacom’s various African operations.
Knott-Craig said the Earth Stations will have the potential to provide alternate transmission links for some of Vodacom’s more critical South African signalling infrastructure, ultimately ensuring a more robust network.
Vodacom’s Broad Based Black Economic Empowerment transaction is well advanced and the details are due to be announced as previously stated in the third quarter of this calendar year.
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