Vodacom is losing data customers – Here is why

Vodacom released a trading update for the quarter ended 30 June 2019, which revealed that the company added 608,000 customers in South Africa over the quarter.

Despite the growth in subscribers, Vodacom South Africa’s service revenue declined by 1.2% to R12.6 billion.

This, Vodacom CEO Shameel Joosub said, was a result of the proactive reduction in out-of-bundle data prices, data usage regulations, and the transition between national roaming partners.

The regulations prompted mobile networks to reduce out-of-bundle (OOB) data prices and automatically block OOB usage, with customers having the option to opt-in to OOB billing.

Decline in data customers

One of the surprises in Vodacom’s results was a decline in data customers in South Africa – down from 20.434 million in June 2018 to 19.930 million in June 2019.

Vodacom spokesperson Byron Kennedy told MyBroadband the decline of 504,000 data users was the result of a combination of factors.

These factors include proactive measures to reduce churn on prepaid SIM cards as well as new ICASA regulations which have slightly reduced the number of customers with incidental data usage.

Big increase in data traffic

Despite the reduction in data customers, data traffic increased by 51.9%, an acceleration from the previous quarter’s growth of 42.0%.

“We have seen an increase in the migration of customers to larger bundles as customers consume more data through our shorter validity period bundles,” Vodacom said.

The company added that the proportion of bundles sold above 100MB almost doubling year-on-year while data bundle sales increased 6.3% to 233,000.

“Average usage on smart devices increased 52.2% to 1.2GB, with ample room for further growth. 4G take up continues to grow, with devices increasing 28.1% to 10.4 million,” Vodacom said.

Now read: Out-of-bundle data price cuts hurting Vodacom in South Africa

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Vodacom is losing data customers – Here is why