Strong data and subscriber growth for Vodacom
Vodacom has released its interim results for the period between 1 April and 30 September 2021, showing solid subscriber growth in South Africa.
It also posted growth in revenue and operating profit, and an increase in average data usage among customers with smart devices.
“In South Africa, we delivered service revenue growth of 3.6% driven by connectivity demand, an additional 1.1 million data customers, incremental wholesale revenue and growth in our new services,” said Vodacom CEO Shameel Joosub.
“This was an impressive result given the demanding comparative associated with lockdowns in the prior period.”
Joosub said that Vodacom Business delivered another strong performance, with service revenue increasing by 11.5% to R8.5 billion while revenue generated from financial services in South Africa increased by 15.0% to R1.3 billion.
He said that Vodacom would invest more than R10.5 billion into its network during the current financial year.
This is in addition to the R47 billion Vodacom spent over the past five years alone.
Key financial figures (South Africa):
- Service revenue: +3.6% to R28.6 billion
- Mobile contract revenue: +4.0% to R10.6 billion
- Mobile prepaid revenue: –0.3% to R12.5 billion
- Operating profit: +1.6% to R10.5 billion
- Blended ARPU: –8.2% to R90
- Prepaid ARPU: –12.5% to R56
- Contract ARPU: +1% to R299
Key subscriber statistics (South Africa):
- Total subscribers: +6% to 45.4 million
- Prepaid subscribers: +6.4% to 39.1 million
- Contract subscribers: +3.4% to 6.4 million
- Data subscribers: +2.4% to 22.8 million
Vodacom said that the reported subscriber revenue growth rate was negatively impacted by a R142 million non-cash contribution to service revenue in the prior period related to a loyalty programme provision.
Adjusting for this one-off, underlying service revenue growth was 4.1%.
New services such as financial and digital services, fixed products and the Internet of Things delivered strong growth, contributing R4.0 billion of South Africa’s service revenue.
Regarding the decline in average revenue per user (ARPU), Vodacom said that the average revenue from prepaid users reached R64 in 2020 as subscribers increased usage during South Africa’s more stringent lockdown restrictions.
As these restrictions eased, prepaid ARPU normalised.
“Encouragingly, prepaid ARPU of R56 in the second quarter is higher than pre-Covid levels and up 1.8% quarter-on-quarter, as price transformation initiatives supported incremental usage,” Vodacom stated.
“The combination of ARPU normalisation and subscriber growth resulted in a broadly flat mobile customer prepaid performance in the period.”
Adjusting for the R142 million loyalty programme provision release in the prior period, prepaid mobile customer revenue increased 0.8% during the year.
Despite the impact of lockdown restrictions on last year’s results, which Vodacom said magnified data demand, data traffic increased 13.1% and accelerated to 17.9% in the second quarter.
Quarter-on-quarter, data traffic was up 12.6%.
“We added 1.1 million data customers in the period, reaching 22.8 million customers, up 2.4%,” the operator said.
“Smart devices were up by 11.1% to 24.5 million while 4G devices increased by 21.5% to 17.2 million. The average usage per smart device increased by 7.3% to 2.2GB per month.”
Revenue generated from financial services was up 15.0% to R1.3 billion.
Vodacom said that this revenue growth was underpinned by its Airtime Advance product, where it advanced R6.5 billion in airtime during these six months — an increase of 14.3%.
“Airtime Advanced represented 45.5% of total prepaid recharges in the period,” Vodacom said.
Insurance revenue increased 11.8%, supported by growth in policies which were up 6.8% to 2.1 million.
Now read: Inside the Vodacom deal to buy Vumatel and DFA