SITA 'not institutionally ready' for IoT

SITA ready
for IOT?

SA State IT Agency
outlines strategy.

Sunday, Dec 16th

Vodacom group adds 4.8m subs in six months

Vodacom group adds 4.8m subs in six months

Vodacom added 4.8 million customers across its group in the first six months of the financial year, an increase of 10.7%.

However, its new black empowerment transaction hurt headline earnings per share (HEPS) for the six months ended 30 September.

According to the group's interim results, released this morning, Vodacom added 2.5 million more customers in SA over the half year and another 2.3 million subscribers in its international operations. Safaricom added 373 000 customers, bringing the combined customer base up to 109 million.

The group saw service revenue increase by 6.1% to R36.8 billion, while overall revenue increased 5.6% to R44.4 billion.

A highlight during the six months was the conclusion of Vodacom's new broad-based black economic empowerment (BEE) ownership deal, but the deal had a negative impact on HEPS for the six months.

"In September, we concluded our second BEE transaction under the YeboYethu umbrella to replace the highly successful R7.5 billion deal launched in 2008," says Vodacom group CEO Shameel Joosub.

"Valued at R16.4 billion, the new scheme is the biggest ever in the telecommunications industry in South Africa and makes YeboYethu our third largest shareholder. As expected, the costs associated with this transaction had a once-off impact on headline earnings per share."

Because of this, overall HEPS were down 13.5% to 385cps, compared to 445cps a year ago. Excluding the charges relating to the BEE transaction and contribution from Safaricom, HEPS rose 6%.

To facilitate the new BEE structure, the group issued an additional 114.5 million shares. Despite this, it still increased its interim dividend by 1.3% to 395cp.

In SA, service revenue increased 4.6% to R27.9 billion, supported by strong customer growth. International operations service revenue growth accelerated to 12.8%, boosted by strong growth in data and M-Pesa.

Group earnings before interest and tax (EBIT) improved 3.4% to R11.2 billion, with strong improvement in international operations. Earnings before interest, tax, depreciation and amortisation (EBITDA) for the group increased by 4.7% to R16.5 billion.

The group made a significant capital investment of R5.3 billion to expand its coverage and improve the quality of its networks.

"We invested R4 billion in SA alone in the past six months and at the same time we reduced effective voice and data prices by 8.5% and 16.4% respectively. We continue to accelerate our rural coverage expansion programme to bridge the digital divide and will prioritise an additional 200 villages this year to add to the 101 communities that we connected during the first quarter of this year," Joosub adds.

He says in SA, underlying growth has weakened as the country's economic slowdown increasingly weighs on consumer spending in the market. Despite this, service revenue rose "as anticipatory measures driven by the use of big data machine learning in more areas of the business has contributed to countering some of these pressures".

Vodacom added 2.3 million prepaid customers during the first six months, but saw lower prepaid average revenue per user, down 6.9%, as it attracted new customers with lower spend levels than the current base and also as a result of customers opting for shorter validity periods for data bundles at a lower price.

"Our strategic focus on providing customers with easier access to airtime through Airtime Advance and using big data analytics to further enhance this proposition, has resulted in R2.9 billion of airtime generated through this platform. Revenue earned from this service more than doubled, with 8.4 million customers now using this convenient way to purchase airtime," the group says.

International endeavours

Vodacom's international operations include Tanzania, the Democratic Republic of the Congo (DRC), Mozambique, Lesotho and a 34.94% stake in Safaricom in Kenya.

"Mozambique produced an excellent performance, while the momentum from our commercial actions in Tanzania and DRC last year continues to gather pace. This contributed to the strong performance in our international portfolio where normalised service revenue grew 11.4%, led by rising customer numbers, accelerating demand for data and improved growth in M-Pesa," Joosub adds.

"The contribution to the group by our mobile money platform continues to improve. The combined customer base, including Safaricom, grew 13.7% to 34.2 million.

"In our international operations, we processed M-Pesa transactions worth $14 billion [R202 billion], supporting a 25.2% increase in revenue to R1.4 billion. M-Pesa now supports 21 million Safaricom customers, an increase of 8.8%, and M-Pesa now constitutes nearly one-third of its service revenues," the CEO says.

He says the strategic investment in Safaricom, concluded in the previous financial year, is exceeding the company's expectations, having contributed R1.4 billion to the Vodacom group's operating profit. Safaricom reported a 7.7% increase in service revenue and an 18.7% rise in EBIT.

"In September, Vodacom Lesotho became the first company to commercially launch 5G on the African continent. This makes Vodacom Lesotho among the first in the world to lay claim to this innovation, paving the way for our other operations to follow suit once we secure the requisite spectrum," says Joosub.

Big data drive

"Looking ahead, the relative economic and currency stability in most of our international markets is pleasing and we will continue to invest heavily in our networks, artificial intelligence and big data analytics to drive financial inclusion, further enhance customer experience and progress Vodacom's digital telco strategy."

Joosub says he is pleased Telkom has selected Vodacom as its new roaming partner, and looks forward to delivery on this long-term mutually beneficial agreement.

"Apart from the commercial benefit, this partnership will also result in cost savings for Vodacom."

He says efforts to reduce the cost to communicate are contingent on having access to the right spectrum at reasonable market-related prices.

"While we are encouraged by the significant progress in recent times regarding the licensing of 4G spectrum in SA, there are still a number of areas of concern with the current draft Electronic Communications Act, as well as inconsistencies in the proposed policy and policy directions to ICASA on licensing unassigned high demand spectrum. We remain committed to engaging with relevant stakeholders to find a suitable outcome to move SA forward," Joosub concludes.

ALSO ON ITWEB AFRICA

South Africa: Vodacom, EFF make up Published on 04 December 2018

Leaders meet and commit to engage on policy issues of mutual interest.

Namibia to improve ease of doing business Published on 10 October 2016

ICT one of several key imports characterising ongoing and growing trade between the two Southern African countries.

Entersekt gains early certification for e-commerce authentication solution Published on 13 December 2018

Entersekt has gained EMVCo certification for its 3-D Secure 2 access control server.

Mozambique expects to raise over US$83-million from spectrum auction Published on 12 December 2018

Only three operators participated in the auction.