Huge subscriber and data traffic growth for Vodacom in South Africa

Vodacom has released its interim results for the six months ended 30 September 2018, which show big positives in South Africa.

The results show that the company added 4.8 million customers in the six months, up 10.7%.

This comprised of:

  • 2.5 million additions in South Africa
  • 2.3 million additions in international operations

Vodacom said as a result, its service revenue increased 4.6% to R27.9 billion. International operations service revenue growth accelerated to 12.8%. EBITDA grew 2.8% to R13.8 billion.

Vodacom CEO Shameel Joosub noted, however, that underlying growth was weakened by the South Africa’s economic slowdown

“The 2.5-million increase in customers in South Africa since March shows that our sustained effort to deliver greater value is working across prepaid and contract,” said Joosub.

He added that device sales were also negatively impacted by a weaker rand against the US dollar.

Positive signs

The growth in South Africa saw service revenue up 4.6%, while revenue growth was “somewhat lower” at 4.3%.

“Mobile customer revenue grew 3.0%, sustaining a strong trend in the first six months, which was driven by a strong growth in customers, both contract and prepaid, slightly offset by lower ARPU reflecting lower spending customer inflows.”

Vodacom’s work to bring down prices has also been progressing well, and it said that following the introduction the “plus” plans – representing 50% of the contract base – it gained sufficient information to predict the changing usage behaviour on these packages.

“Consequently we have adjusted our revenue deferral methodology, in line with the customer usage insights. This has resulted in acceleration of the recognition of revenue of R292 million in the period. Contract ARPU was down by 2.0%, with customers opting for plans with lower tariffs, but higher device financing component.”

Prepaid

Of the new customer additions in the period, 2.3 million were prepaid customers.

Vodacom said customers continue to “respond well to our bundle offers”, and that its focus is on providing customers with easier access to airtime through Airtime Advance and using big data analytics to further enhance this proposition.

“This has resulted in R2.9-billion of airtime generated through this platform. Revenue earned from this service more than doubled, with 8.4 million customers now using this convenient way to purchase airtime,” said Vodacom.

Data usage

Increased data usage was also observed by Vodacom, and data traffic grew by 28.6%.

This was “slightly impacted” by its efforts to improve monetisation by re-balancing the promotional data offered to customers to encourage usage, it added.

“Active smart devices on the network were up 10.5% to 19.1 million, of which 9 million are 4G devices with overall data customers up 3.2% to 20.5 million.”

Data bundles sales were up 26.0% – or 437 million data bundles sold.

The enterprise segment performed well in the period, too, with mobile customer revenue up 7.7% and customer growth of 9.7%.

“In addition, fixed-line service revenue grew at 29.2% to R1.3 billion, with IPVPN services such as IP connect Fibre and Broadband connect showing good growth. Cloud and hosting revenue grew 14.2% with strong growth both in ‘infrastructure as a service’ and ‘platform as a service’ offerings,” said Vodacom.

Its fibre to the home and business connections also doubled in the period.

All of this was in combination with R4 billion being invested into Vodacom’s network – which sees the network reaching 99.5% of the population on 3G and 83% on 4G.

“High-speed transmission was expanded to 93% of sites and carrier aggregation was enabled on more than 5,000 sites in the six months,” added Vodacom.

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Huge subscriber and data traffic growth for Vodacom in South Africa