Vodacom customer numbers fall - TechCentral

Vodacom customer numbers fall

Shameel Joosub

Shameel Joosub

Vodacom Group said customer numbers fell in the first quarter as authorities in international markets that include Tanzania and the Democratic Republic of Congo made changes to the way the company registers subscribers.

Group active customers declined by 2,6% to 61,8m in the three months through June, even as the number of South African subscribers rose, the Johannesburg-based company said in a statement on Thursday.

International service revenue growth of 14% was also impacted by the new regulations, the wireless operator said.

The shares declined by 1,5% in Johannesburg, on track for the steepest drop in more than a month, to R167,32 as of 12.01pm. That pared the increase for the year to 9,8%, compared with a 7,3% gain for cross-town rival MTN Group.

“As expected, our international operations have been impacted by new customer registration processes, which was offset by currency gains,” CEO Shameel Joosub said in the statement, without providing detail of the changes.

“We remain committed to actively bedding down new customer registration processes in the various markets in which we operate.”

Vodacom’s report of changing regulatory regimes in sub-Saharan African markets is a reminder of MTN’s experience in Nigeria, where the continent’s biggest wireless operator was fined 330bn naira ($1,1bn) for missing a deadline to disconnect unregistered customers. More than 40% of Vodacom’s subscribers are outside its home market, as the company taps a rise in demand on the continent for data services such as mobile banking.

‘Encouraging’ numbers

Vodacom first quarter sales gained 5,8% to R19,9bn as the wireless operator invested in its network and boosted data revenue by 19%. The company is about 65% owned by Newbury, England-based Vodafone.

“It is an encouraging set of numbers from Vodacom, and it shows that these businesses are anything but” fully grown, Byron Lotter, a money manager at Vestact, which holds Vodacom stock, said by phone.

Vodacom has been striving to boost Internet services in its home market as tough competition and stringent regulation eat into revenue from phone services. The company was forced to abandon a two-year pursuit of Neotel earlier this year, and is considering bids for broadband spectrum made available by the government this month after a delay of about five years.

“Data demand continues to grow exponentially while technology is advancing well beyond what we can viably deliver with the available spectrum,” Joosub said by e-mail. “There is no doubt that greater access to spectrum will give South Africans faster speeds and, inevitably, lower data pricing.”  — (c) 2016 Bloomberg LP

2 Comments

  1. Andre Stols on

    I have been a long time customer of Vodacom and my contract is up for renewal soon- this time round, I am getting some options from the other operators in order to compare prices and if another operator is offering better, I am going also.