A vodacom shop at Voda world Midrand JHB. (771) Photo: Leon Nicholas A vodacom shop at Voda world Midrand JHB. (771) Photo: Leon Nicholas
Vodacom’s international operations helped to boost the cellular operator’s second-quarter revenue by 9.3 percent with its total customer base climbing 29.2 percent to 50 million in the three months to June, it said yesterday.
Vodacom chief executive Pieter Uys said: “Overall this was a good quarter with a particularly strong performance from our international operations supporting group service revenue growth of 8.7 percent.
“The connectivity revolution is well under way with close to 16 million customers actively using data, up 43 percent from the prior year.”
Driving the performance were gains at the international operations, which now account for 20.5 percent of the group’s service revenue, and increases in data usage by subscribers through the rise in smartphone use, Vodacom said in its trading statement.
Vodacom said: “Smartphones remain a key growth driver with active smartphones increasing 40.9 percent year on year to 4.9 million devices and usage almost doubling to about 120 megabytes per smartphone customer per month compared with a year ago.”
The company said it had witnessed robust data demand with data income contributing 15.4 percent of service revenue and total data customers growing 43.3 percent to 15.7 million.
Vodacom made significant investments to improve the speed and coverage of data networks by adding 109 third-generation (3G) base stations in the quarter.
Vodacom said the positive macroeconomic environments in the countries it operated in, coupled with successful commercial execution, led to high growth in operations including Tanzania, Democratic Republic of Congo (DRC), Mozambique and Lesotho.
The 46.7 percent increase in the international operations service revenue was driven by a 29.4 percent rise in subscribers to 19 million.
Vodacom was pursuing cellphone penetration in the DRC, where only 20 percent of people used wireless devices, Uys said.
The company is fighting a court order to confiscate and sell its 51 percent stake in its Kinshasa-based subsidiary.
Vodacom increased its DRC base by 47 percent in the June quarter from a year earlier, to 6.2 million users.
The company’s M-Pesa mobile service in Tanzania increased its customers by 120.7 percent to 3.6 million.
“I am particularly pleased with the sustained high growth delivered by international operations. The primary driver has been solid commercial execution, supported by a healthy macroeconomic environment,” Uys said.
Meanwhile, South Africa’s customer base grew by 29.1 percent to 31 million, as it added 2 million customers during the reporting period.
Last year in the comparative period, Vodacom’s customers in South Africa increased by 20 percent to 27.7 million. Overall it added 1.9 million customers across its operation taking its total customer base to 45.4 million a year ago.
“In South Africa, one of Vodacom’s key advantages is the size and reach of its network. Given the increasingly competitive environment, quality and capacity both set Vodacom apart,” Uys said.
Letticia Nkumbula, a telecoms analyst at Africa Analysis, said Vodacom made gains in its international operations because data and voicemail market penetration was still well below South Africa’s.
She said service providers were also winning as cellphone manufacturers, especially in the smartphone division, were now reaching both lower-end and high-end consumers.
The two local cellular service provider giants, Vodacom and MTN, are facing price competition from smaller operators Cell C and Telkom’s 8.ta mobile division.
Cell C, which is now headed by former Vodacom chief executive Alan Knott-Craig, introduced low-cost voice packages in May in an attempt to grab market share.
Telkom’s 8.ta, which started up in 2010, said last month that it more than tripled cellphone subscribers in the year to March to 1.5 million customers.
Nkumbula said giant service providers such as Vodacom needed to retain and attract customers and to focus on responding to competition from smaller operators.
Vodacom shares closed 2 percent higher at R91.84.