Connecting Africa is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 3099067.

4G/5G

Vodacom Boasts Growth as Data Revenues Overtake Voice in South Africa

Article Image
Major mobile operator Vodacom reported growth in revenues, customer numbers and net profit during the six months to Sept. 30, the first half of its fiscal year, and generated more revenues from data services than from voice revenues in its core market of South Africa.

The operator, which offers mobile services in Tanzania, the Democratic Republic of Congo, Mozambique and Lesotho, as well as South Africa, grew its total customer base by 11.8% compared to the same period a year ago to a total of 71.1 million, while its overall group revenues grew 4.6% year-on-year to 42 billion South African rand (US$2.88 billion) and net profit was 7% higher at ZAR6.7 billion ($462 million).

In South Africa, Vodacom's key market, subscriber numbers grew by 2.9 million to hit 40 million, of which nearly half are data service customers. Overall revenues grew by 7.7% to ZAR33.9 billion ($2.34 billion), boosted by phone sales and data service revenues. The operator noted that revenues from data services in South Africa grew by 15% to ZAR11.4 billion ($786 million), contributing 42.6% of all service revenues and surpassing voice revenues. Vodacom now has 6 million 4G customers, up by nearly 63% compared to the end of September last year.

Enterprise services also delivered "strong growth" in South Africa, with service revenues up by 10% to ZAR6.8 billion ($469 million). Of particular note is Vodacom's success with its Internet of Things (IoT) services targeted at enterprise users across the country, with 3.3 million IoT connections now established. IoT revenues grew 22.4% to ZAR399 million ($27.5 million) as the operator rolled out new offerings in e-health, connected agriculture, smart metering and logistics.

The numbers beyond South Africa were a bit more muted. While 1.4 million customers were added in total across Tanzania, the Democratic Republic of Congo, Mozambique and Lesotho -- which Vodacom refers to as its International operations -- to reach a total of 31.1 million, revenues dipped by 5.2% to ZAR8.6 billion ($593 million), but that was due to currency exchange fluctuations. The operator noted that if constant exchange rates were applied, revenues would have increased by 5%.

As you'd expect, Vodacom, which is majority owned by Vodafone, is investing in its data service-supporting mobile systems in its international operations, with the number of 3G and 4G radio access sites on the rise, but there's some way to go before those territories generate more income from data than from voice: Data services (not including M-PESA) accounted for just 13.6% of revenues in Vodacom's international operations in the six months to the end of September, only slightly better than a year ago.

M-PESA mobile finance services, however, continue to attract users and are popular in all four international territories, with 14.8 million users in total. According to Vodacom, 61.7% of customers in Tanzania use M-PESA services, while the corresponding number in Mozambique is 56%. In Lesotho, 35.3% of customers use M-PESA, while in DRC the number is 22.2%.

And of course Vodacom now also has a foothold in Kenya, having completed the acquisition of a near 35% stake in Safaricom. Vodacom doesn't include Safaricom's revenues or customer numbers as part of its operations, but it does report profits (or losses) from that holding, and in the fiscal first half Safaricom contributed ZAR349 million in net profit to Vodacom's bottom line, having had a strong first half itself. (See Safaricom Ramps H1 Revenues, Profits, Subs and Vodacom to Buy Safaricom Stake in €2.36B Deal.)

Vodacom counts the conclusion of its Safaricom investment as a key milestone during the first half of the fiscal year, alongside the public listing of a 25% stake in Vodacom Tanzania (the largest IPO ever on the Dar es Salaam Stock Exchange). That IPO raised ZAR2.77 billion ($191.4 million) in net proceeds for Vodacom.

Vodacom Group CEO Shameel Joosub: 'Our strategy to become a leading digital company and empower a connected society remains a key focus.'
Vodacom Group CEO Shameel Joosub: "Our strategy to become a leading digital company and empower a connected society remains a key focus."

"Looking ahead, our strategy to become a leading digital company and empower a connected society remains a key focus," noted Vodacom Group CEO Shameel Joosub in an official statement announcing the results. "We anticipate that our investments in big data and sophisticated machine learning will increasingly allow us to provide customers with relevant Just 4 You propositions. In turn, this should continue to drive revenue and customer growth across all markets."

The results, though, were not good enough to appease investors, as Vodacom's share price lost 3.35% of its value during trading on Monday.

— Ray Le Maistre, International Group Editor, Light Reading for Connecting Africa.

Innovation hub

Story

Hot startup of the month: Pan-African fintech KamaPay

This month's hot startup is pan-African fintech KamaPay, which helps individuals and businesses make cross-border payments on the continent.

Story

Afretec awards $3.3M in grants to African research teams

The African Engineering and Technology Network (Afretec) has awarded grants worth $300,000 each to 11 university research teams across Africa to advance digital technologies.

More Innovation hub

Latest video

More videos

Sponsored video

More videos

Industry announcements

More Industry announcements

Flash poll

All polls

Africa Tech Perspectives

Story

Deep dive into East Africa's tech startup ecosystem

New survey reveals a lack of access to investors, reliance on international VCs and global recession trends as the biggest barriers for East African tech startups to access funds.

Story

Challenges and opportunities for women's tech careers

A new survey reveals that COVID-19, the cost-of-living crisis, skills shortages and a lack of mentorship have negatively affected women's career development over the past two years.

Story

Survey: Opportunities for Women in Tech

Take our new survey for women across Asia, Europe and Africa looking at the biggest challenges and opportunities for women-led enterprises and trends in tech careers for women.

More AfricaCom perspectives

Upcoming events

London Tech Week
June 13-16, 2023
Queen Elizabeth II Centre, Broad Sanctuary, London SW1P 3EE
Cybertech Africa 2023
August 1-2, 2023
Kigali Convention Center, Kigali, Rwanda
Africa Tech Festival, Home of AfricaCom and AfricaTech
November 13-16, 2023
CTICC, Cape Town
More Upcoming events

Guest Perspectives

Story

Omdia View: February 2023

By Omdia Analysts

In February 2023 key events in the Middle East and Africa included a major Internet project for Africa's underserved by Liquid Intelligent Technologies and Microsoft as well as a 5G launch in Tanzania – that and more in this month's Omdia View.

Story

Omdia View: July 2022

By Omdia Analysts

Kenya and Zambia move towards 5G with new spectrum allocations while Tunisie Telecom plans to shut down its 3G network - that and more in this month's Omdia View.

More Guest Perspectives

Partner perspectives

All Partner Perspectives

Like us on Facebook

Newsletter Sign Up


Sign Up