Vodacom reports customer and revenue boost

Vodacom Group on Monday (11 May) reported a 4.8% rise in revenue for the year ended March 2020, to R90.75 billion, while adding 5.9 million customers, to serve a combined 116 million customers across the group.

It comes at a time when the country is in a phased lockdown period to combat the impact of the Covid-19 pandemic.

Group operating profit climbed 13.2% to R27.7 billion, while headline earnings per share (HEPS) was up 8.9%, to R19.45.

Vodacom declared a final dividend of 405 cents per share.

Total financial services customers climbed 12.8%, to 53.2 million, adding 6 million customers in the year, it said.

South Africa revenue was up 2.2% to R52.7 billion, with data usage elasticity supporting recovery to growth in the second half.

Shameel Joosub, Vodacom Group chief executive, said: “An improved second half performance in South Africa and the sustained growth of our International businesses contributed to the group’s 8.9% increase in headline earnings per share to 945cps and a dividend return of 845cps to shareholders.

“The past year has been characterised by strong customer growth – we now connect 116 million customers across the group, including Safaricom – and the benefits of prudent portfolio diversification.”

South Africa highlights

Service revenue grew by 2.3% for the year despite a tough economic environment, out-of-bundle rate cuts and the implementation of the End-User Subscriber Services Charter (EUSSC), affecting out-of-bundle usage and revenue, the group said.

In the prepaid segment, customer numbers were down 5.6% during the period to 35.2 million.

“The decline was mainly a result of continued optimisation of gross additions to improve the quality of our base,” Vodacom said.  “This has resulted in the one-month active customers being stable, evidencing this improvement. ”

Contract customer revenue increased 1.9%.  “We have gained customers in this segment, up 4.2% to 6.1 million,” Vodacom said.

Enterprise customers were up 12.8%, with a significant increase in the last two weeks ahead of the lockdown in South Africa, it said.

Data traffic was up 66.0% for the year, with continued acceleration during the fourth quarter, evidencing the expected elasticity to make up for the pricing transformation initiatives during the year.

“We ended the year with data customers up 9.7% to 21.9 million and smartphone users up 11.8%, of which 73.3% are 4G customers.”

The number of 4G devices on Vodacom’s network increased 34.5% to 12.9 million, while the average usage per smart device increased 56.0% to 1.5GB.

“The increase in the drivers of data growth gives us confidence that we will continue to see elasticity to compensate for the pricing transformation initiatives agreed with the Competition Commission and implemented from 1 April 2020,” the group said.

“We improved our fibre roll-out in the second half of the year, more than doubling the total number of homes and businesses connected to 61 427, with our owned fibre passing 104 000 homes and businesses.”

In South Africa, Joosub said that sharp data price reductions, specifically out-of-bundle data rates, announced in the first quarter led to a steady increase in data traffic as the year progressed with 1.9 million more data customers connecting to the Vodacom
network, a 9.7% increase to 21.9 million.

Looking ahead, Joosub said that the assignment of temporary spectrum in South Africa and elsewhere is welcomed and will assist in alleviating network congestion as more people work and are entertained at home.

“At the same time, we are executing on our robust, scalable operational continuity plans by anticipating and reacting to the current extraordinary environment to ensure our long-term sustainability.”

Read: Vodacom launches 5G mobile network in Joburg, Pretoria and Cape Town – check if you have coverage in your area

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