Glossary

Active customer
A registered customer who has made or received a chargeable event in the last three months or, where information on incoming events is not available, a customer who has made a chargeable event in the last three months.

AGM
Annual General Meeting. A meeting of shareholders that must be held once a year to approve the report and accounts and the final dividend per share, and to vote on any other resolutions (such as the election of directors and re-election of auditors).

ARPU
Total ARPU is calculated by dividing average monthly recurring revenue by the average monthly total of reported customers during the period. Total ARPU excludes revenue from equipment sales and non-service revenue. Prepaid, contract and community services ARPU only includes recurring revenue generated from Vodacom customers.

Assets
Assets are rights or other access to future economic benefits controlled by an entity as a result of past transactions or events. In most financial statements, assets are divided into two categories - current and long-term (or liquid and fixed). Current assets are expected to be converted into cash or used up within one year. For Vodacom, these are principally amounts which we have billed our customers but not yet received, and short-term investments. Long-term or fixed assets include property, plant and equipment, long-term investments and intangible assets, such as goodwill and licences. They are not acquired with the intent to resell them; rather, they provide the capacity to earn revenue. For Vodacom, this is mainly exchange and network equipment, property and similar items which we own and use to run our business and investments in our ventures.

Auditor
A firm of accountants who examine ('audit') amounts and disclosures in a company's financial statements. The auditors for Vodacom are Deloitte & Touché.

Bandwidth
Is a measure of the quantity of signals that can travel over a transmission medium such as copper or a glass fibre strand. It is the space available to carry a signal. The greater the bandwidth, the greater the information carrying capacity. Bandwidth is measured in bits per second.

Blue chip
A description usually applied to the biggest and most highly regarded companies quoted on the stock market, shares in whom are considered a reliable and profitable investment.

Bluetooth
A short-range wireless technology designed to allow connection of portable devices in a wire-free manner. For example connection of a wireless hands-free kit

Broadband
Refers to telecommunication in which a wide band of frequencies is available to transmit information

Buyback
A company empowered by a shareholders' resolution can offer to buyback shares from shareholders. Usually used as a means to return capital to shareholders.

Capital gain
The profit made between the buying and selling price of assets, such as shares or property.

Capital Gains Tax
A charge to capital gains tax (CGT) may arise when you dispose of an asset which is worth more than it was when you acquired it. If you make a loss this can reduce any CGT you have to pay on sales of other assets. You are liable to pay tax on the total chargeable gains arising on disposals you make in any one tax year (after various reliefs have been given) in excess of the annual exemption limit.

Capital growth
The rise in the value of an initial investment.

CDMA
Code Division Multiple Access - a generic term for a type of digital mobile telephony technology which supports a number of mobile connections. This technique is used by some alternative systems to GSM See also W-CDMA.

Churn
Customers disconnecting from mobile telephone networks. Churn is calculated by dividing the annualised number of disconnections during the period by the average monthly total of reported customers during the period.

Closed period
The period from the reporting date until the release of the interim or preliminary results, during which the directors are not permitted to buy or sell the company's shares.

Contract customer
A subscriber with whom Vodacom has a formal contractual agreement with the customer billed on a monthly basis for access fees and any additional airtime or data used. Vodacom contract tariffs all have an amount of airtime included in the monthly charge. See Prepaid Customer.

Cum dividend (cum cap, cum rights, cum all (see ex dividend))
Purchase of share cum dividend means that the buyer of a share is entitled to the next dividend payment; cum rights means that the purchaser is entitled to shares from a forthcoming rights issue; cum cap means that the purchaser is entitled to a scrip issue; cum all means that the purchaser is entitled to all of these. Opposite of ex dividend.

Depreciation and Amortisation
Depreciation and Amortisation are means to spread the cost of fixed assets over the periods they are expected to benefit. Amortisation is the writing off of an intangible asset over the projected life of that asset. Depreciation is a measure of the cost of the benefits of a fixed asset that have been consumed during the period.

Dividend
The proportion of a company's profit that it pays to its shareholders, usually declared as a dividend per share. Vodacom dividends are usually paid twice a year: interim dividends based on half-year results and final dividends based on full-year results.

Dividend cover
The number of times a company could pay its most recent net dividend out of its net profit (profits after tax).

Dividend yield
The dividend paid by a company as a percentage of the share price.

Earnings
Profit available to ordinary shareholders, after all operating expenses (including goodwill, amortisation and exceptional items), interest charges, taxes, minority interests and preference dividends have been deducted.

Earnings per share (EPS)
Earnings divided by the number of ordinary shares issued. EPS are a guide to how well a company is performing.

EBITDA
Earnings Before Interest, Taxation, Depreciation and Amortisation

EDGE
Enhanced Data rate for GSM Evolution - a development of GSM which allows for the faster delivery of advance mobile services such as full multimedia messaging.

Equity
The voting capital in the company, represented by the ordinary shares.

Ex dividend date
To receive the dividend you must own the shares before it goes ex dividend. For a period before the dividend is paid, usually about six weeks, the share price is quoted as 'ex dividend' or 'xd'. If you sell your shares in this period you will still be entitled to the dividend payment, but the buyer will not. The ex dividend date is usually a few days before the Record Date.

Ex dividend (ex rights, ex cap, ex all)
Purchase of a share ex dividend (xd) means that the buyer of a share is not entitled to the next dividend payment; ex rights means that the purchaser is not entitled to shares from a forthcoming rights issue; ex cap means that the purchaser is not entitled to a scrip issue; ex all means not entitled to any of these. Opposite of cum dividend.

Fibre optics
Is where messages or signals are sent via light rather than electrical signals down a very thin strand of glass. Light transmission enables much higher data rates than conventional wire, coaxial cable and many forms of radio. Signal travel at the speed of light and do not generate nor are subject to interference

Fibre rings
Have come to be used in many fibre networks as they provide more network resilency; if there is a failure along a route and a ring is broken, the direction of the traffic can be reversed and the traffic will still reach its final destination.

Final dividend
The dividend recommended by the directors for shareholders' approval at the AGM for payment after the meeting. Together with the interim dividend gives the total dividend for the year.

Financial year
A company's accounting period, also known as the company's fiscal year. Vodacom's financial year is from 1 April to 31 March.

Fixed line
Telecommunications lines that are not wirefree but connected to physical points.

2G
Second generation technology. A term used to describe the digital cellular networks such as GSM which were introduced as a replacement for analogue cellular networks.

2.5G
Technological upgrades to standard GSM mobile networks which increase data transmission speeds and efficiency. The term encompasses HSCSD, GPRS and EDGE. Seen as an intermediate technology between 2G and 3G.

3G
Third generation (UMTS) technology using new data transmission standards and operating at a different part of the spectrum range to second generation networks. Licences have been issued by European governments to cover the UMTS spectrum around the 2GHz level.

Goodwill
An intangible asset which provides a competitive advantage, such as a strong brand, reputation, patents, royalties and trademarks. In an acquisition, goodwill appears on the balance sheet of the acquirer and is the amount by which the purchase price exceeds the aggregate of the fair values of the identifiable assets and liabilities acquired.

GPRS
General Packet Radio Service. An enhancement to the GSM mobile communications system that supports data packets. It enables a continuous flow of data packets over the system for applications that support web browsing and file transfer for example. With GPRS, your phone is always connected to WAP and other data services, so you don't need to dial in each time you want to access data services.

Gross
Amount before tax or other items have been deducted. After the deductions, the amount is described as 'net'.

GSM
Global System for Mobile Communication - an open, non-proprietary digital wireless technology platform.

Hertz (Hz)
Measure of frequency or cycles per second. Usually measured in millions as Megahertz (MHz) or in billions as Gigahertz (GHz).

HTML
Hypertext Mark-up Language - the language used to create web documents.

HSCSD
High Speed Circuit Switched Data. Circuit-switched wireless data transmission for mobile users at data rates of 28.8 Kbytes per second or higher, compared to a maximum of only 9.6 Kbytes per second using traditional GSM networks.

ICASA
The Independent Communications Authority of South Africa (ICASA) is the regulator for the South African communications, broadcasting and postal services sector. ICASA was established by an Act of statute the Independent Communications Authority of South Africa Act of 2000, as Amended.

IEEE
The Institute of Electrical and Electronics Engineers is a US based organisation providing expertise across a wide range of engineering fields. One of its main areas of activity is the development of industry standards.

Institutional investor or shareholder
Large financial organisations, such as a bank, insurance company, pension fund or investment trust that hold stock and shares in other companies.

Interim dividend
A dividend declared part way through a company's financial year, based on the half year results.

Interim results
Unaudited figures for the first six months trading of any financial year that provide an indication of the company's trading and profit performance since the last full year accounting period. Vodacom usually announces its interim results in November.

JSE Limited
The JSE Limited (registration number 2005/022939/06), a public company duly registered and incorporated with limited liability in accordance with the company laws of South Africa, licensed as an exchange under the Securities Services Act, No.36 of 2004

Liabilities
Liabilities are obligations to pay or convey assets or provide other economic benefits in the future, based on past transactions. Liabilities are divided into current and long-term. Current liabilities are those obligations that will be satisfied within one year; long-term liabilities are those expected to be satisfied after one year of the balance sheet date.

Liquidity
The proportion of cash or cash equivalents in a company's assets. Sometimes used as a measure of the near term financial health of a company. Also used as a measure of the volume of shares being traded, which may affect the ability of buyers or sellers to build/unwind large holdings without a substantial impact on the price.

Market capitalisation
Value at current market prices of a company's equity capital. It is calculated by multiplying the current share price by the number of shares outstanding.

Market price
The price at which a share can currently be traded in the market.

Merger
The joining of two companies.

Minority interests
The rights of outside shareholders of subsidiary companies of the group to a proportion of the group's profits or assets.

Minutes of Use (MOU)
Vodacom’s average monthly minutes of use per customer, or average MOU, is calculated by dividing the average monthly minutes during the period by its average monthly total reported customer base during the period. MOU excludes calls to free services, bundled minutes and data minutes.

MMS
Multimedia Messaging Service (MMS) is a 'store and forward' messaging service which allows mobile subscribers to exchange multimedia messages with other mobile subscribers. MMS supports the transmission of additional media types: text, picture, audio, video or a combination of these.

Mobile penetration
Vodacom calculates penetration or teledensity based on the total number of customers at the end of the period per 100 persons in the population of each country. Population is the estimate population at the mid-year in the periods indicated.

Mobile traffic
Vodacom’s traffic comprises total traffic registered on Vodacom’s network, including bundled minutes, outgoing international roaming calls and calls to free services, but excluding national and incoming international calls

M-PESA
A mobile payment solution that enables customers to complete simple financial transactions by mobile phone

Multi-access portal
A service that provides Web access from a range of different devices such as mobile, fixed and cable television devices.

Net
The amount that is left after tax or other items has been deducted from the 'gross' amount.

Net assets
The assets that remain at a given point in time after all the liabilities have been deducted.

Operating profit
The difference between turnover (or revenue) and total operating expenses, but before interest and taxation have been taken into account.

Option
The right (without an obligation) to buy or sell securities at a given price (exercise or strike price) before a given date (expiry date).

Ordinary shares
Security that confers ownership in a company. They entitle the owner to a distribution of the profits (known as dividends) and the right to vote at company meetings. Ordinary shares rank after preference shares and debentures in priority for the payment of dividends or in a winding up.

Packet switches
Is designed specifically for data traffic, as it cuts the information up into small packets, which are each sent across the network separately and are then reassembled at the final destination. This allows more users to share a given amount of bandwidth. X.25 and frame relay are all packet switching techniques

PDA
Personal Digital Assistant - devices such as personal organisers (e.g. Palm and iPAQ).

Portal
A gateway or entry point to the Internet incorporating significant functionality such as search engines, news alerts and personal preferences that enable users to access the data they want from the Web from a central point.

Preliminary results announcement
The first release of a company's unaudited full year results for the financial year to the Stock Exchange, declared as a prelude to the publication of the annual report and accounts.

Prepaid customer
A customer who does not have a written contract and buys his/her talk time in advance, by purchasing vouchers from retail outlets for example. See Contract Customer.

Pre-tax profit (or loss)
All profit (or loss) before tax in a period.

Price/earnings ratio (P/E ratio)
Share price divided by earnings per share over the latest 12-month period. The result offers investors a way of comparing companies’ prospects - a high P/E ratio suggest a company has strong growth potential.

Profit and loss account
An account compiled at the end of the financial year showing that year's turnover and expense items.

Proxy form
A form by which a shareholder votes without needing to attend an annual general meeting by appointing someone else to vote on his/her behalf.

Quote
If a company has a quote (or is 'quoted'), its shares can be bought and sold on a stock market. Means the same as listed.

Real-time quote
This is the actual price of an investment at that moment. However, most share prices displayed on websites are delayed by at least 15-20 minutes.

Record date
The date determined by a company's Board of Directors on which an investor must be recorded as an owner of shares to qualify for a forthcoming dividend or share distribution.

Retained profit
The remaining profit retained by the company after all deductions have been made, including tax, interest, minority interests and dividends.

Rights issue
Offer of shares to existing shareholders (usually in proportion to their existing shareholdings) to raise money.

Roaming
The facility for a subscriber to use his/ her mobile for both outgoing and incoming calls on any other network, in the same or another country, that has entered into a commercial roaming agreement with the subscriber's home network.

Scrip issue An issue of shares to existing shareholders that does not affect the value of the shareholders interest or raise any money for the company; it is a means for a company to transfer money from reserves into permanent capital. Can also be known as a capitalisation issue or bonus issue.

Securities
General term for certificates or bearer warrants representing ownership of stock, shares or bonds issued by companies to investors.

Share
Common term for equity.

Share capital
The total amount of shares issued, the most common of which are ordinary shares.

Share Certificate
A certificate conferring ownership rights in a company.

Share option
See Option.

Share transfer secretary
Organisation that keeps a record of individual shareholders. The transfer secretary for Vodacom for ordinary shareholders is Computershare Investor Services (“Computershare”).

SIM penetration
Is the measurement of the number of active SIM cards in the country expressed as a percentage of the total population

Stock Exchange News (SENS)
Is a system provided by the JSE which disseminates company announcements and price sensitive information i.e. mergers, take-over, rights offer, capital issues e.t.c all which have an impact on the share price movement

SMS or text messaging
Short Message Service. A service which enables mobile telephone users to send and receive text messages on their handsets.

Spectrum
A specific frequency range.

Stamp duty
The tax on the buying of shares and other assets, such as houses.

Stockbroker
Person or firm that arranges the sale or purchase of shares or other securities.

Stock transfer form
The form signed by the seller of a share authorising the company to remove his/her name from the register of members and substitute that of the buyer. Normally used for off-market transactions.

TDMA
Time Division Multiple Access - a generic term for a type of digital mobile telephony technology including GSM.

Total Shareholder Return (TSR)
The measure of the returns that a company has provided for its shareholders - the product of the share price movements plus dividends reinvested over a stated period. It is an indicator of a company's overall performance.

Total turnover
Products and services sold to customers by a company during a specified period. For Vodacom, our total turnover includes the turnover of overseas operating companies controlled by the group.

UMTS
Universal Mobile Telecommunications System. Also known as 3G, the third generation digital standard for mobile telecommunications.

Unique user
The holder of a unique number identifying a subscription in an ASM or UMTS mobile network, being the telephone number to SIM card in a mobile phone.

Volatility
In relation to the share price, used to indicate the relative amount or percentage by which it rises and falls during a period of time.

Volume
In relation to shares, the total number of traded (bought and sold) in a given period.

WAN
Wide Area Network comprises network in different geographic locations that are connected often over the public network

WAP
Wireless Application Protocol. A global, open standard for providing mobile phones, pagers and other handheld devices with secure access to e-mail and simple webpages. WAP allows you to access information through your phone.

W-CDMA
Wideband CDMA - a radio interface technology which has been developed as an open standard in the 3GPP standards development organisation.

Wireless
Communications that are not dependent on a fixed line connection.

Wi-Fi
This refers to WLAN products built to the IEEE 802.11 standard, which have been certified for interoperability by the Wi-Fi Alliance.

Withholding tax
Tax deducted in some countries from dividends paid to non-residents of those countries. Individuals may be able to claim it back under certain conditions.

WLAN
Wireless Local Area Network. A subscriber can connect to a local area network of computers, for example, via a wireless radio connection. The IEEE 802.11 standards are examples of WLAN systems.

WML
Wireless Mark-up Language - the language behind WAP.