Mozambique

Vodacom Mozambique’s revenue for the year ended 31 March 2009 rose 69.4% to R735 million, primarily due to the 27.5% increase in customers to 1.6 million, a 12% tariff increase from 1 October 2007, strong growth in data revenue and a stronger local currency against the Rand. In meticals, revenue increased 34.4%, with the metical average rate appreciating 20.7% to the rand in the year. Data revenue accounted for 4.8% of Vodacom Mozambique’s revenue for the year, up 118.7% to R35 million.

We made strong progress as the challenger to the state-owned market leader in  Mozambique, recording a 4% gain in market share in the year to an estimated 44% at 31 March 2009.

The growth in customers was a result of increased network coverage, improved products and services and an increased number of distribution partners. Growth was supported by various promotional tariffs with free on-net calls and recharge bonuses. For the year ended 31 March 2009, churn increased to 69.0%, as compared to 58.7% for the year ended 31 March 2008, as a result of strong competition in the market and a large part of the base being seasonal holiday visitors from outside Mozambique. During the year total ARPU increased by 37.6% to R43 per month, primarily due to tariff increases and an appreciation of the local currency to the rand. In metical, ARPU increased 9.2% in the year due also to market share gains among higher spending contract customers.

Vodacom Mozambique’s loss from operations was R253 million and EBITDA loss was R19 million for the year ended 31 March 2009, as compared to a loss from operations of R157 million and an EBITDA loss of R32 million in the prior year. Profitability was negatively impacted by the impairment of the network assets of R106 million.

Capital expenditure increased 140.5% to R267 million, or 36.3% of revenue, largely driven by network expansion and the investment in fibre optic infrastructure in Maputo. During the year an additional 60 sites were rolled out, bringing the total to 280 as at 31 March 2009.

It is likely that a third network licence will be issued in the future and we have continued to position the business to defend its market position.