Vodacom Group, Africa’s biggest wireless operator by market value, reported a 4,1% increase in first-half sales as strong growth in its home market of South Africa offset falling customer numbers in some international businesses.
Sales rose to R40,2bn rand, while service revenue growth was 5,3%, led by the addition of 2,3m active clients since March, mostly in South Africa, the carrier said in a statement on Monday.
International service revenue growth of 5,4% lagged the South Africa figure of 5,6%, while customers numbers in territories that include Mozambique, Tanzania and the Democratic Republic of Congo slumped as governments enforced disconnections and changed registration processes.
“Our network advantage has provided us with flexibility when navigating our international operations through these short-term pressures and we remain squarely focused on the long-term potential,” CEO Shameel Joosub said in the statement. “Nonetheless, I would note the deterioration in the macroeconomic conditions both in the DRC and Mozambique, which we are monitoring closely.”
Vodacom, which is 65% owned by UK-based Vodafone Group, had previously seen the international operations driving growth as more customers start using data and internet services as voice revenue declines. The company reiterated a target of low-to-mid single-digit service revenue growth over three years, excluding spectrum purchases and acquisitions.
Vodacom shares declined 0,6% to R142,24 at 10.25am in Johannesburg on Monday. The stock is down 6,6% this year, valuing the company at R213bn.
Headline earnings per share, which exclude one-time items, were R4,40 in the six months through to September, little changed from a year earlier.
South Africa service revenue grew 5,6% to R25,5bn, driven by strong customer net additions and increased data demand, Vodacom said. The interim dividend was unchanged at R3,95/share.
The carrier will spend R8bn in 2016 to improve its network infrastructure and 12% to 14% of sales in its 2017 financial year. A court hearing on the future of South Africa’s spectrum auction early next year will affect capital expenditure predictions, Joosub said on a conference call.
The South African government and the telecoms regulator had been at odds on how spectrum should be allocated in the country. An auction would enable Vodacom to roll out its network at a much faster rate. The regulator had previously indicated that bidding would start at R3bn, said Joosub. — (c) 2016 Bloomberg LP
