Outlook
As customers continue to contain their spending in the face of ongoing economic weakness, Vodacom
will seek to offer greater value. To further mitigate the pressure on top-line growth and preserve margins,
driving efficiencies across the business will continue to be a priority. Gateway and the relationship with
Vodafone will be key to unlocking further synergies. The Group will weather the economic storm by staying
efficient and competitive.
We will continue to invest in positioning the Group for growth in the sub-Saharan African communications
markets, which remain among the fastest growing in the world. Vodacom Group’s capital expenditure is
expected to be R8.0 billion for the year ending 31 March 2010. The Group’s strong cash flow and balance
sheet is expected to provide the flexibility to invest prudently in strategic growth opportunities and to return
cash to shareholders on a sustainable basis.
Vodacom’s investment case
- We are the market leader in four of five countries of operation, we are the largest broadband provider in South Africa,
and through Gateway, we are the largest pan-African carrier services provider.
- We have a unique platform for growth, with significant opportunity for further mobile penetration, the network
infrastructure to support broadband growth and the resources in place to deliver total communications.
- We have a track record of being first to market with innovative offerings, and have demonstrated strong revenue growth
and cash flow, underpinned by disciplined cost control and capital allocation.
- Our management team is proven, and has the support of Vodafone and a strong and well-balanced Board.
- Our robust business model should enable us to continue delivering an attractive balance between growth and returns to
our shareholders.
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International |
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Gateway |
- Some indications of relief for consumers but businesses
will continue to come under pressure with further
expected increases in unemployment
- Customer registration legislation expected to be
implemented in August 2009, which is likely to lower
churn but also to moderate gross connections growth
- With around 250 new licenses awarded, competitive
pressure is expected to increase
- Expect continued good activity in SA market with focused
promotional activities to drive increased usage
- Efforts to drive penetration of data services will continue
- Focused cost containment initiatives are expected to
preserve margins
- R5.0 billion capital expenditure allocated to South Africa
for the year ending March 2010
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- Trading conditions are expected to remain difficult,
particularly in the DRC
- Customer registration will continue to be a feature of the
regulatory environment in all markets
- Competition likely to place pressure on tariffs in all
international markets
- Low penetration rates should continue to offer long-term
opportunities for customer growth
- Substantial efforts in place to realise efficiencies across
the Group and improve operating profit margins
- R3.0 billion capital expenditure allocated to international
operations for the year ending March 2010 with careful
allocation based on demand
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- Global economic downturn will continue to hamper
carrier voice traffic growth
- Continued growth is expected in mobile connectivity and
data communications
- Strong competition in the business services market,
especially in West Africa, along with competition on
price in mobile voice as operators rapidly expand their
networks
- New submarine cable capacity and terrestrial cables
expected to positively impact the business
- Continued efforts to drive efficiencies, including
identifying and leveraging synergies with the Vodacom
Group, in particular with Vodacom Business
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