Vodacom’s revenue and profit rise despite rate cuts
Mobile phone network Vodacom managed to grow revenue and profit slightly in the year to end-March despite cutting rates.
The company also announced that it was acquiring 35% of Kenya’s Safaricom from its UK parent Vodafone in a deal valued at R34.6bn.
Revenue in the year to end-March grew 1.5% to R81bn and aftertax profit 1.7% to R13bn.
The group declared a final dividend of R4.35, taking its total for the year to R8.30, a 4.4% raise on the previous year’s R7.95.
"In the past year, voice and data prices fell by 14.3% and 16% respectively in SA where significantly more customers benefited from using bundles," Vodacom CEO Shameel Joosub said in its results statement.
"This brings the cumulative reduction in voice and data prices to 42.2% and 44.3% over the past three years. "
In SA, Vodacom said it grew its subscriber numbers by 8.6% to 37.1-million, of which 32-million were prepaid customers.
It attributed its growth in prepaid customers to its "Just 4 You" bundle offer and its "NXT LVL" youth marketing campaign.
Vodacom added 218,000 contract customers during the year with improved loyalty leading to reduced contract churn of 4.2%,
"We have secured SA’s national and provincial government department’s mobile voice and data communications contract for a period of four years," Joosub said.
Outside of SA, Vodacom grew subscribers 9.3% to 29.7-million, recovering from drop caused by African countries enforcing subscriber identification rules
Service revenue outside of SA declined 5.6% to R16.8bn, mainly due to registration requirements in the Democratic Republic of Congo, Mozambique and Tanzania.
Vodacom said it was buying all but 5% of Vodafone’s 40% of Safaricom in exchange for 226.8-million new shares and R51m cash.
Safaricom’s remaining shareholders are the Kenyan government, with 35%; public investors, with 25%; and Safaricom employees, with 0.07%.
"Kenya has a mobile penetration of 88%, which is well below SA’s mobile penetration of 146%," Vodacom said.
"Safaricom’s leading mobile money platform, M-Pesa, is an important driver of Kenyan economic growth, providing essential financial services to over 19-million 30-day active customers."