Vodacom has turned in robust results for the third quarter of its 2016 financial year. In the three months ended 31 December 2015, the telecommunications group reported normalised group revenue up by 7,6% to R21,7bn on the back of strong demand for data.
Group data revenue rose by 27,5% to R5,5bn, representing 32% of service revenue, it said. The customer base increased by 6,8% to 65,2m, with data customers up by 14,5% to 30,3m.
“The two biggest highlights in the quarter are the accelerated service revenue growth of 7,2% in South Africa and the 6,8% increase in the group customer base,” said Vodacom CEO Shameel Joosub in a statement accompanying the quarterly numbers.
“In South Africa, the take-up of our personalised offer “Just for You” was excellent and contributed to a 15,9% reduction in effective voice rates. The international segment delivered robust service revenue growth of 15,2%,” he said.
Vodacom has spent R9,5bn on expanding its network across all the markets in which it operates in the first nine months of the 2016 financial year, Joosub said.
He warned that revenue growth is likely to “taper slightly” in the last quarter of the financial year as a result of a “stronger prior year comparative and a weaker outlook for the consumer in South Africa due to the drought and weaker exchange rate”.
In South Africa, which is by far Vodacom’s biggest market, service revenue growth accelerated to 7,2% thanks to growth in the customer base, stable average revenues per user and strong customer demand for 3G and 4G services. “Revenue grew at 7,1% to R17,1bn, underpinned by a 7,7% increase in equipment revenue with 3m devices sold in the quarter,” it said.
Total active customers in South Africa increased by 8,7% year on year to reach 34,1m. Active prepaid customers increased by 10,3% to 29,2m. Prepaid voice bundle purchases increased by 36,8%, while contract customer additions in the quarter were negatively impacted by 75 000 disconnections by Altech Autopage, resulting in overall flat year-on-year growth in the contract customer base.
Some 83% of contract customers are now on new price plans, with contract in-bundle spend at 71% of contract customer revenue.
Data revenue in South Africa rose by 27,3% to R4,5bn due to “sustained demand for data services and customers upgrading to 3G and 4G devices”.
“The improved affordability of both devices and data bundles supported a 46,6% increase in data traffic,” it said.
“Active data customers increased by 14% to 19,1m. Active smart devices on the network increased by 28,2% to 13,5m and the average amount of data used per month increased by 22% on such devices.”
Data revenue in South Africa makes up 35,3% of service revenue, up from 29,7% a year ago.
4G/LTE coverage has been expanded to 54% of the country’s population, Vodacom said. It said 3G coverage is now 98,3% of the population. — © 2016 NewsCentral Media