More contract customers and data revenue for Vodacom in South Africa

Vodacom has released a trading update for the quarter ended 30 June 2018.

The update for the group showed positive results, with service revenue up 5.2%.

The company also added 2.5 million customers during the quarter – 1.5 million in South Africa and 1 million in its international operations.

This puts Vodacom at 76.5 million customers across the group – up 10.3% year-on-year.

Data once again showed a healthy increase, with group data revenue up by 9.9%. M-Pesa also experienced revenue growth, and excluding currency translation effects, was up 23.8%.

South Africa

Looking at South Africa, Vodacom stated that revenue and customer numbers were up.

Service revenue increased by 4.9% to R13.8 billion in the country, “supported by the improvement in customer revenue growth trends”.

This was despite a subdued macroeconomic and consumer spending environment,” said Vodacom.

Customer numbers increased by 9.5%, reaching 43.1 million.

This was thanks to 1.4 million prepaid customers joining and 75,000 net contract additions.

“Contract customer revenue growth has recovered from declines in previous quarters, to grow at 0.8%. The growth was supported by improved performance in the enterprise segment, reflecting customer and ARPU gains from recent contract sign-ups and improved usage,” said Vodacom.

Overall contract customers increased by 5.9%, while contract ARPU declined by 2.3%.

Voice and data

As has been the case in recent years, data revenue in South Africa continued to rise – while voice revenue dropped once again.

Voice revenue declined by 2.6%, said Vodacom. However, the company said the decline was low thanks to the “success of our personalised voice bundle strategy”.

Data revenue grew by 9.4% to R6.1 billion, contributing 44.1% of service revenue.

“We continue to drive bundle engagement aggressively to ensure a worry-free experience for our customers. The success of this pricing strategy, making data more affordable for our customers, has resulted in a 32.2% increase in data bundle sales and an overall effective price per MB reduction of 17.1%,” said Vodacom.

It added that Vodacom’s 4G data user base grew by 739,000 – reaching 8.1 million customers.

Fixed-line revenue also grew during the period, up 22%. Internet of Things connections increased by 25.2% to 3.9 million, it added.

Network capacity to handle the increase in usage was also factored in during the period, with R2 billion spent on capital expenditure.

Vodacom said it focused on new sites, upgrades, and capacity to “improve network quality and performance”.

“This allowed us to expand our 4G coverage to 81.5%, up from 75.9% a year ago. We also expanded our rural coverage and made progress to improve backhaul performance and capacity by increasing the proportion of self-provided high-capacity sites from 90.1% a year ago to 92.4%.”

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More contract customers and data revenue for Vodacom in South Africa