Vodacom has shown good growth in the user base of its South African operation, and turned in a healthy service revenue increase in its international services for the quarter to June 2014.
Group revenue for the quarter increased by 4,3% year on year to R18,3bn, while service revenue increased by 1,8% to R14,9bn.
The group also showed a strong increase in data revenue of 23,2%. Active subscribers grew by 15,6% to 59,6m, while the active data customer base grew by 36,7% to 25,3m subscribers.
In South Africa, Vodacom executed well operationally and grew customers by 11%, but revenue was hit by a “dramatic” decrease in regulated mobile termination rates, the fees operators charge each other to carry calls between their networks.
Vodacom says it continued its “price transformation strategy”, bringing down the overall effective price per minute by 25,3% to 68c. This led to an increase in outgoing voice traffic of 26,1%, offsetting the price cuts. This elasticity effect was even more keenly felt with data, with a 30,3% reduction in the average effective price per megabyte offset by a 70,1% increase in data traffic.
Although Vodacom South Africa reported a service revenue decline of 2% due in large part to the impact of the cuts to mobile termination rates (2% increase excluding this impact), the group turned in a healthy 17,3% increase in revenue from its international services, supported by a growing customer base and payments platform M-Pesa. The contribution of the international businesses to group service revenue increased to 23,4%.
“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,” says CEO Shameel Joosub.
Vodacom added another 473 4G/LTE base stations, bringing the total number of LTE sites to 1 389. It also expanded its 3G network by deploying another 293 sites to bring the total to 7 541. Three-quarters of Vodacom’s sites are now connected using the company’s own high-capacity transmission.
The number of active smartphones and tablets on Vodacom’s South African network increased 19,3% to 8m devices. The average monthly data usage on smartphones increased 44,5% to 312MB per device and usage on tablets increased by 43,0% to 848 MB per device. — © 2014 NewsCentral Media
