Vodacom shows big growth in customers, revenue, and data

Vodacom has released its annual financial results for the year ended 31 March 2018.

The group has shown “strong” revenue growth over the period, which is up 6.3% to R86.4 billion.

Group service revenue grew 3.4% to R70.6 billion, and Vodacom added 7.0 million customers across its operations during the year.

“Safaricom added 1.4 million customers. In combination, we now reach over 103 million customers across the group,” stated the results.

Group EBIT improved 4.4% to R23.1 billion, added the company.

“Net profit increased 18.6%, boosted by the Safaricom acquisition and by the profit from the sale of Helios Towers Tanzania Limited.”

On the investment side, Vodacom said it put in R11.6 billion to expand its coverage and improve network quality – with R8.9 billion of that spent in South Africa.

South Africa

In Vodacom’s South African business, the company delivered a “robust performance”.

This was despite ongoing data pricing transformation and a low economic growth environment.

“Service revenue increased 4.9% to R54.6 billion, supported by strong customer additions, a higher contribution from data revenue, and growth in enterprise services,” said Vodacom.

Revenue grew by 8.1% to R70.0 billion, as a result of equipment revenue growth of 15.2%, underpinned by smart device sales – which now constitute 70.0% of total devices sold.

EBITDA grew 4.7% to R28.1 billion and delivered a margin of 40.1%.

Vodacom said it gained 4.5 million new customers locally over the past year, taking it to 41.6 million in total – up 12.1%.

Prepaid customers increased by 4.3 million, up 13.4%, while the network added 229,000 contract customers.

“Progress on our pricing transformation strategy has resulted in short-term pressure on contract ARPU, which declined 4.4% to R390.”

Strong sectors in the local market were:

  • 2.3 billion bundles sold, up 51.3%.
  • Customers using bundles have grown 13.9% to 18.7 million.
  • Data revenue up 12.8% to R23.4 billion.
  • Data traffic growth hit 43.7%.
  • 4G customers up 44.8% to 7.3 million.
  • Enterprise service up 10.8%, now contributing 25.7% of service revenue.
  • Service revenue growth from fixed services increased 55.6%.

Regulation hurdles

Vodacom, like all major mobile operators in South Africa, has come under pressure of late from consumer groups and ICASA.

Local consumers have stated that mobile data prices are too high, and that out-of-bundle rates must be lowered.

ICASA followed these complaints with an investigation into mobile data prices and expiry periods, along with users being billed for OOB usage by default.

The regulator recently stated that operators must allow subscribers to roll over unused data, or transfer it to another user on the same network.

It said operators would also no longer be allowed to charge out-of-bundle tariffs without first obtaining subscriber consent.

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Vodacom shows big growth in customers, revenue, and data