Vodacom South Africa grew revenue to R58.5 billion in the 2022 financial year, supported by a strong surge in customers buying prepaid airtime on credit.
The company’s latest annual results state the 3.8% service revenue growth over last year’s results was thanks to continued demand for connectivity, incremental wholesale revenue and growth in new services.
“New services such as financial and digital services, fixed and IoT were up 8.5% and contributed R8.4 billion, or 14.4% of South Africa’s service revenue,” the company said.
Financial services in particular increased by 12.4% to R2.7 billion.
Vodacom explained this was due to the strong adoption of Airtime Advance, which allows customers to buy bundles even when they don’t have airtime.
“Revenue growth was underpinned by our Airtime Advance product, where we advanced R13.0 billion in airtime during the year, representing 45.2% of total prepaid recharges,” Vodacom said.
While the operator does not charge any interest on these bundles, they come with a service charge and are more expensive than buying with pre-loaded airtime.
Customers must pay within 30 days, or the operator will disable the feature and reduce their credit limit.
Growth of the operator’s more conventional revenue streams was muted because the previous year was unusual — more people relied on mobile connectivity during stricter Covid-19 lockdowns.
By 31 March 2022, Vodacom customers in South Africa reached around 45.46 million, up roughly 3% from the 44.06 million as of 31 March 2021.
Vodacom acquired most of its 271,000 new contract customers at Vodacom Business.
Including this segment, mobile contract customer revenue increased by 5.5% to R22 billion. Consumer contract revenue alone increased by just 1.5%.
Prepaid mobile customer revenue declined 0.7% to R25.2 billion, although it added 1.1 million prepaid customers.
Vodacom said that if you adjust for loyalty programme rewards of R142 million in the prior year, prepaid mobile customer revenue was flat.
Despite the overall decline in prepaid revenue, Vodacom said prepaid ARPU [average revenue per user] was at R56 above the pre-Covid-19 level of R54.
Vodacom’s fixed-line business also saw a significant growth of 13%, driven by the strong adoption of fibre with homes and businesses connected, reaching 142,211.
The operator’s fibre network now also passes 155,903 homes and businesses.
When including its equipment sales for the year, Vodacom hit R80.8 billion in revenue, an increase of 5.3% from 2021.