Press releases

Vodacom Group

Vodacom Group Limited trading update for the quarter ended 30 June 2016

Thursday, 21 July 2016

Salient features

  • Group service revenue up 7.3% (4.6%*) to R16 806 million with revenue up 5.8% (3.4%) to R19 902 million
  • Group active customers declined 2.6% to 61.8 million, impacted by new customer registration processes in our International markets
  • Group data revenue increased 19.4% to R5 786 million, representing 34.4% of service revenue
  • South Africa sustained robust service revenue growth of 5.6% to R12 426 million
  • South Africa delivered strong active customer growth, up 5.4% to 35.1 million, adding just under 1 million customers in the quarter
  • International service revenue increased 13.5% (2.8%*) to R4 479 million; impacted by new customer registration processes
  • Group capital expenditure for the three month period at R2 705 million, equivalent to13.6% of Group revenue
  Quarter ended Yoy % change
Rm June 2016 Reported Normalised*
Group revenue 19 902 5.8 3.4
South Africa 15 443 4.0 4.0
International 4 620 12.8 1.9
Group service revenue 16 806 7.3 4.6
South Africa 12 426 5.6 5.6
International 4 479 13.5 2.8

Shameel Joosub, Vodacom Group CEO commented:

Our strong performance last year has continued into the first quarter of our new financial year and is reflective of the successful execution of our well-planned strategy. Despite the tougher economic environment in most of the countries in which we operate, the Group delivered robust service revenue growth of 7.3%.

One of the major highlights this quarter is the stellar number of customer additions in South Africa in both postpaid and prepaid, where we added almost one million customers. This can largely be attributed to the significant investments that we continue to make in infrastructure to sustain our competitive advantage to deliver the best network, superior customer service and great value to our customers through innovation such as our personalised Just 4 You offers. A combination of these factors also means that our net promoter scores continue to track well ahead of our competitors and shows that our CARE initiative, aimed at maximising the customer experience, is gathering momentum. A prime example of this is the expanded functionality that we have built into the MyVodacom App.

Customer demand for data remains robust with data revenue growth of 18% in South Africa as we continue to drive a worry-free experience through in-bundle offers having introduced an innovative solution that more effectively notifies customers when bundles are depleted. The 16% reduction in effective price per megabyte underscores our commitment to providing customers with great value, as does the recent launch of new Vodacom branded devices, which includes our first premium smartphone, the Smart Platinum 7.

As expected, our International operations have been impacted by new customer registration processes which was offset by currency gains. This resulted in growth of 13.5% (2.8%*). We remain committed to actively bedding down new customer registration processes in the various markets in which we operate. M-Pesa is performing very well in our International operations with an increase in active customers of 34.7% to 10.6 million[1]. M-Pesa revenue has grown 47.5% to R500 million. Importantly, both Mozambique and the DRC have reached a critical mass of 1.4 million customers each.

We welcome the announcement made by the Independent Communications Authority of South Africa on 15 July 2016, inviting operators to participate in an auction of much-needed spectrum. This is a major progressive step for the economy, South Africa's telecommunications industry and the country as a whole. The allocation of spectrum will be transformative from a broadband access perspective and is expected to make reaching the goals set out by government’s SA Connect policy more achievable.

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