Strong data growth propels Vodacom revenues higher

Pieter Uys ... Vodacom anything but in the red

Strong growth in demand for data, where revenues have risen by 23,8% in the past year, has helped propel the Vodacom Group’s total sales higher by 12,2% to R18bn in the third quarter of its financial year to 31 December 2011.

The JSE-listed telecommunications operator, which is controlled by the UK’s Vodafone, has reported a 41,2% increase in active data customers to 13,8m. In SA, revenues were up by 7,6% on customer growth of 25,4%, to 31,7m. The SA business added 2,8m subscribers in the three-month period. Group subscribers number now above the 52m mark, growing by 5m in the quarter.

CEO Pieter Uys says the SA business “defied the somewhat gloomy economic conditions”. He credits this to its summer advertising campaigns, targeted promotions and attractive handset deals. Interestingly, growth was strong in rural areas.

“The strong growth in customers and data usage helped offset the year-to-date reduction of 16% in both voice and data prices,” Uys says.

Average revenue per user in SA was down 14,6% to R140, largely as a result of lower termination rates — the fees operators charge each other to carry calls onto their networks — and a higher prevalence of lower usage customers in the mix. It expects a seasonal increase in churn in the coming quarters from currently low levels.

Though active data customers in SA climbed by 31,5% to 11,4m, revenue growth was up by a slower 19,3%, to R1,9bn, as a result of price reductions. Demand for smartphones remained strong, with 655 000 devices activated in the three-month period. Vodacom SA now has 4,8m active smartphone users on its networks, accounting for 18% of all devices.

International operations accounted for more than 40% of the increase in subscriber numbers. Data revenue outside SA leapt by 135,4% because of strong demand for data and mobile financial services. M-Pesa has enjoyed solid support in Tanzania, with 2,7m active customers representing 23,4% of the base. M-Pesa now acccounts for 8,5% of service revenue in Tanzania, Vodacom’s second biggest market after SA, and processed US$400m worth of transactions in December.

Vodacom’s share price was trading mostly flat shortly after the release of the quarterly update.

Download Vodacom’s full third-quarter trading statement here (PDF file).  — Staff reporter, TechCentral

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