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Vodacom reveals 4.3 per cent revenue growth

July 24, 2014 • Company News, Top Stories

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(Image Source: Darryl Linington)

The Vodacom Group, who is part of the Vodafone Group, published its financial results and quarterly update for the period ended 30 June 2014.

The report revealed a 4.3 per cent year-on-year growth in group revenues, reaching ZAR18.28 billion (US$1.74 billion).

Vodacom said it was continuing with its strategy to reduce prices in order to drive usage. The effective price per minute was down 25 percent year-on-year to 68 cents, while outgoing traffic rose 26 percent.

According to a release here are the official statistics:

– Group revenue increased 4.3% (2.7%*) to R18 287 million

– Group service revenue increased 1.8% to R14 897 million, up 5.0% excluding cuts in mobile termination rates (MTRs)

– Group data revenue increased 23.2% to R3 584 million, now 24.1% of service revenue

– Group active customers grew 15.6% to 59.6 million and active data customers¹ grew 36.7% to 25.3 million

– South Africa service revenue declined 2.0% due to MTR cuts, 2.0% increase excluding impact of MTRs

– International service revenue up 17.3% (7.8 %*) supported by strong customer growth and M-Pesa

Quarter ended

Year on year % change

Rm

June 2014

Reported

Normalised*

Revenue

18 287

4.3

2.7

South Africa

14 791

1.7

1.7

International

3 591

17.2

7.4

Service revenue

14 897

1.8

South Africa

11 442

(2.0)

(2.0)

International

3 493

17.3

7.8

* Represents normalised growth at a constant currency (using current period as base). Refer to page 9 for a reconciliation of normalised growth. 1. Excluding M2M customers

Shameel Joosub, Vodacom Group CEO commented: “In the past year we’ve added more than eight million new customers, taking our active customer base to just shy of 60 million. Group revenue for the quarter was R18.3 billion, an increase of 4.3% over last year. Data and the International businesses have once again been the largest contributors to growth, and the entire business is seeing the benefit of our sustained investment programme.”

In South Africa we executed well operationally and grew our customer base by 11.0%, but revenue was impacted by the dramatic decrease in MTRs. We continued with our price transformation strategy, bringing down the overall effective price per minute by 25.3% to 68 cents and driving an increase in outgoing voice traffic of 26.1%. The elasticity effect was even more notable on data, with a 30.3% reduction in the average effective price per megabyte more than offset by a 70.1% increase in data traffic.

Supporting this increase in traffic in South Africa, we added another 473 LTE sites in the quarter, an increase of more than 50%. On top of this we added another 293 3G sites, and 74.5% of our sites are now connected using our own self-provided high capacity transmission. This increase in capacity has the dual benefit of giving us the best possible platform from which to grow the South African business as well as the ability to reduce prices on a sustainable basis. The additional capacity means that we are able to maintain superior network performance even as traffic increases in response to lower prices.

The International businesses performed well with service revenue increasing 17.3% and the customer base increasing 21.7%. The contribution of the International businesses to Group service revenue increased to 23.4%. Data continues to be a key growth driver with the number of active data customers increasing 69.5%. Mobile data revenue including M-Pesa grew 51.1%. We now have more than 6.6 million M-Pesa customers. We increased the number of 3G sites in our International operations by more than 50%.

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