Vodacom shows strong data growth

Vodacom has released its trading update for the quarter ended 30 June 2021, showing strong data growth and increased revenue compared to last year.

It reported group revenue of R24.8 billion, up 9.0%, noting that this was partially offset by the rand’s recovery by 20% against a basket of international currencies.

In South Africa, service revenue was up 5.2% to R14.1 billion, which the company said reflected sustained demand for connectivity services and strong growth in new services.

“Since the beginning of the quarter, South Africans have benefitted from a further 14% price reduction in the 1GB 30-day data bundle — marking a cumulative 43% cut since April 2020 — and our significant investment into infrastructure and technology of R2.9 billion to support network capacity and resilience,” said Vodacom Group CEO Shameel Joosub.

“A combination of greater value and an enhanced customer experience supported sustained demand for connectivity as customers continued to work, entertain, and educate from home, and contributed to service revenue growth of 5.2% in South Africa.”

Mobile contract customer revenue increased by 4.1% in South Africa.

The company reported that Vodacom Business continued to deliver strong growth in the quarter within the mobile contract segment, supported by its work-from-home solutions. In contrast, consumer contract revenue remained broadly unchanged.

Vodacom said that it refreshed its  Red contract tariffs later in the quarter, providing customers with larger data allocations.

It added 8,000 contract customers and increased average revenue per user (ARPU) by 1.4%.

Summary of quarterly results for Vodacom South Africa
30 June 2021 31 March 2021 30 June 2021 YoY% change reported
Revenue R19.5 billion R20 billion R17.3 billion 13.2%
Service revenue R14.1 billion R14 billion R13.4 billion 5.2%
Capital expenditure R2.9 billion R2.4 billion R2.7 billion 9.3%
Customers 44.6 million 44.1 million 39.4 million 13.1%

In the prepaid segment, Vodacom reported a revenue increase of 1.8%.

“Our recently launched ‘Everyday-ta’ promotional tariff is designed to further enhance active days, as it provides customers with a daily allocation of data for 30 days,” the company stated.

Strong quarterly net additions of 532,000 underpinned prepaid customer growth of 15.1%, as did the year-on-year impact of customer acquisition challenges at the onset of Covid-19 related lockdowns.

Prepaid ARPU declined 14.1%, reflecting the material increase in the average customer base over the period and the lapping of usage growth related to lockdowns.

On a quarter-on-quarter basis, ARPU declined 3.5% due to price transformation and incremental pressure on consumer wallets.

Adjusting for these impacts, Vodacom said ARPU was up 0.5% quarter-on-quarter.

Data traffic on Vodacom’s network in South Africa increased by 8.1% despite a high base.

“We expect the rate of data traffic growth to improve through the year, as the base effect impact of lockdowns moderate through the course of the year, and we continue to enhance our value proposition,” said Vodacom.

“We have 21.1 million data customers on our network, with smart devices up 13.3% to 23.5 million and 4G devices increasing 26.8% to 16.4 million.”

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Vodacom shows strong data growth