Vodacom thumbs its nose at weak SA economy - TechCentral

Vodacom thumbs its nose at weak SA economy

Vodacom Group’s reported headline earnings per share (Heps) for the six months ended 30 September 2018 fell by 13.5% to R3.85, impacted negatively by the once-off effects of a new black economic empowerment deal. But the mobile operator reported a solid underlying performance despite the weak economy.

As part of the R16.4-billion YeboYethu BEE deal, Vodacom issued 114.5 million new shares, which hit the Heps line. Excluding the charges relating to the BEE transaction and contribution from Safaricom, Heps rose by a healthy 6% to R4.53.

Group service revenue rose by 6.1% to R36.8-billion, with total revenue up 5.6% to R44.4-billion, on the back of good customer growth numbers. It added 2.5 million new subscribers in South Africa and 2.3 million in its other markets in Africa, bringing the group total, including Safaricom in Kenya, to 109 million.

Group earnings before interest and tax improved 3.4% to R11.2-billion, despite capital expenditure of R5.3-billion. Safaricom contributed R1.4-billion in profit (after deducting the amortisation of fair-valued assets and before minority interest).

It declared an interim dividend per share of R3.95.

Vodacom Group CEO Shameel Joosub said the use of big data and machine learning technologies helped cushion the impact of the recession-plagued South African economy.

“The 2.5 million increase in customers in South Africa since March shows that our sustained effort to deliver greater value is working across prepaid and contract and is evidence that our personalisation through big data is delivering results,” Joosub said.


Capex in South Africa in the six-month period was R4-billion. Yet it claimed it reduced its effective voice and data prices by 8.5% and 16.4% respectively.

South African contract Arpu, or average revenue per user, was down by 2%, with customers opting for plans with lower tariffs, but with a higher device financing component.

It added 2.3 million prepaid customers resulting in strong customer growth of 10.9%. This was partly offset by lower prepaid Arpu, down 6.9%, as it attracted users with lower spend levels and as customers opted for shorter validity periods for data bundles at lower prices.

South African data traffic grew by 28.6%, while billed traffic was up 36.7%. Active smart devices on the network were up 10.5% to 19.1 million, of which nine million were 4G devices. Overall data customers in the country rose by 3.2% to 20.5 million.  — (c) 2018 Bloomberg LP

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