Vodacom has released a trading update for the quarter ending 31 December 2018.
The update shows that group revenue was up 1.5% to R23.0 billion – with service revenue up 2.4% to R18.9 billion.
There was also strong customer growth by the company, and group customers increased 7.1% to 79 million.
“This was up 5.4% in South Africa and 9.3% in our international operations,” said Vodacom.
Other growth areas for the group were data revenue, which increased 2.2% to R6.8 billion, and international data revenue, which grew 25.4%.
South African and international operations
The picture was less rosey when looking only at South Africa, with service revenue declining by 0.9% to R13.9 billion.
Vodacom said this was impacted by pricing transformation and customers optimising promotional data bundle allocations.
Shameel Joosub, Vodacom Group CEO, said that this performance was offset by overall international growth for the group.
“Excluding Safaricom, we added 198,000 customers in the three-month period and now serve 79 million across the group, having added a healthy 5.2 million customers to the Vodacom network in the past year,” said Joosub.
He added that promotions in South Africa have impacted revenue, as the company “implemented a number of generous promotions in the quarter” – including the SummerGigs campaign.
“These efforts have impacted data revenue growth, as it did not yield the expected elasticity given a tougher than anticipated consumer spending environment. However, our proactive efforts to keep customers in-bundle have reduced our future exposure to out of bundle revenues.”
Joosub added that Vodacom we will be implementing the End-User Subscriber Service Charter Regulations locally on 1 March, which will “drag on data revenue growth in the near-term”.
“However, we are particularly encouraged by the positive momentum on the regulatory front in South Africa following firm commitments by the government and the regulator to stage an auction of 4G spectrum.”
In international markets, Joosub said growth was good and service revenue increased by 13.2%.
This was on the back of sustained data revenue growth and M-Pesa’s continued success.
“Our international portfolio, excluding Safaricom, now contributes 27.5% to overall group service revenue. The significant increase in customers in the quarter and strong commercial execution contributed to data revenue growth of 25.4% and to the 30.3% growth produced by M-Pesa.”