{"id":293430,"date":"2019-01-25T08:18:18","date_gmt":"2019-01-25T06:18:18","guid":{"rendered":"https:\/\/mybroadband.co.za\/news\/?p=293430"},"modified":"2019-01-25T09:28:56","modified_gmt":"2019-01-25T07:28:56","slug":"vodacoms-big-data-shocker","status":"publish","type":"post","link":"https:\/\/mybroadband.co.za\/news\/business\/293430-vodacoms-big-data-shocker.html","title":{"rendered":"Vodacom’s big data shocker"},"content":{"rendered":"

Vodacom has released its trading update<\/strong><\/a> for the quarter ended 31 December 2018, which showed its first-ever decline in mobile data revenue in South Africa.<\/p>\n

This decline in revenue came despite a strong increase in data usage, with data traffic on its network increasing by 41.4%.<\/p>\n

More encouraging news was that active smart devices on the Vodacom network increased by 13.3% to 20.2 million, with average usage per smart device increasing by 31.9% to 1.1GB.<\/p>\n

With an ever-growing 4G network, Vodacom\u2019s 4G customers increased by 40.5% to 9.2 million.<\/p>\n

Considering the continued growth in active smart devices and data usage by these devices, it is curious that its data revenue declined.<\/p>\n

\n

Vodacom explains<\/h3>\n

Vodacom said in its results statement that its data revenue was impacted by customers using data rewards from its Summer campaign to offset their usual spend.<\/p>\n

It would, however, be incorrect to assume that Vodacom\u2019s Summer campaign was the sole contributor to the decline in data revenue in South Africa.<\/p>\n

A Vodacom spokesperson told MyBroadband that they continue to respond to calls to address the cost to communicate in South Africa, which resulted in a 40% decline in effective data prices over the past three years.<\/p>\n

The company significantly increased data bundle sales, which means more customers are using in-bundle data which is more affordable.<\/p>\n

\u201cWe are managing out-of-bundle spend, with more inclusive value contracts and affordable data bundles with shorter validity periods, both of which are increasing in popularity with customers,\u201d Vodacom said.<\/p>\n

In terms of Summer Gigs, Vodacom said it is fair to say that against the tougher consumer backdrop the campaign\u2019s expected elasticity was lower than anticipated.<\/p>\n

\n

Alarm bells ringing<\/h3>\n

Despite the good news for consumers that they are getting more data at lower prices, Vodacom will be under pressure to show data revenue growth in the next quarter.<\/p>\n

Data growth has always helped to offset the decline in voice revenue for Vodacom, but this trend has come to an end.<\/p>\n

The company will now have to find new ways to make more money from data \u2013 and increasing prices is not a viable long-term strategy in an increasingly-competitive market.<\/p>\n

The chart below shows the rapid decline of Vodacom\u2019s data revenue growth over the last two years.<\/p>\n

\"\"<\/a><\/p>\n

\n

Share price decline<\/h3>\n

Shareholders were quick to punish Vodacom for its poor performance in South Africa, with revenue declining 1.3% and service revenue declining by 0.9%.<\/p>\n

Vodacom\u2019s share price was down by over 7.0% after the company released its trading update, as shown by the chart below.<\/p>\n

\"\"<\/a><\/p>\n

\n

Now read:\u00a0Big surprise as Vodacom\u2019s voice and data revenue declines in South Africa<\/a><\/h3>\n","protected":false},"excerpt":{"rendered":"

For the first time in history Vodacom\u2019s data revenue has declined, which should set the alarm bells ringing at the company.<\/p>\n","protected":false},"author":23,"featured_media":232631,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_sma_x_autopost_status":"idle","_sma_x_autopost_error":"","_sma_x_post_id":"","_sma_facebook_post_id":"","_sma_instagram_post_id":"","_sma_threads_post_id":"","_sma_x_attempts":0,"footnotes":""},"categories":[19],"tags":[23982,35,41],"class_list":["post-293430","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-data-revenue","tag-headline","tag-vodacom"],"_links":{"self":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/293430"}],"collection":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/users\/23"}],"replies":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/comments?post=293430"}],"version-history":[{"count":2,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/293430\/revisions"}],"predecessor-version":[{"id":293534,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/293430\/revisions\/293534"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media\/232631"}],"wp:attachment":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media?parent=293430"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/categories?post=293430"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/tags?post=293430"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}