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

African lockdowns boost Vodacom data traffic

Article Image
Vodacom has recorded major data traffic growth over the past three months with COVID-19 lockdowns in various African countries forcing people to work and study from home.

In South Africa, data traffic skyrocketed by 97.7% for the quarter ended June 30, 2020. In the four operations outside of SA, data traffic increased an average of 44.3%.

The COVID-19 pandemic is having a mixed financial impact on Vodacom. Revenue growth in South Africa was solid at 6.4% due to strong demand for data and connectivity services, but its other four operations were negatively impacted by decreased economic activity.

The "international operations" – in Mozambique, Tanzania, Lesotho and the Democratic Republic of the Congo (DRC) – saw a 10.7% increase in service revenue, benefiting from the rand devaluation. However, if you exclude currency gains there was a decline of 5.3% as a result of lower economic trading activity, free M-Pesa services and customer registration requirements in these businesses.

Overall the group's quarterly trading update reported an increase in service revenue of 7.6% year-on-year, and group revenue grew by 5.6%.

"In South Africa, the combination of increased demand for data following significant tariff reductions of up to 40% effected on April 1 and more people working and being educated remotely, resulted in a significant increase in mobile and fixed traffic in the first quarter," said Vodacom Group CEO, Shameel Joosub, in the quarterly update statement.

"As a result, we accelerated network infrastructure spend by R500 million [US$30.2 million] to R2.7 billion [$163 million] in Q1 and used the temporary assignment of spectrum by [the Independent Communications Authority of South Africa (ICASA)] to rapidly increase network capacity to ensure that we continue to deliver a high-quality experience to customers. The temporary spectrum assignment also allowed us to fast track the launch of South Africa's first mobile 5G network and our fixed 5G commercial service," he said.

Vodacom Group CEO Shameel Joosub
Vodacom Group CEO Shameel Joosub

Data demand
In South Africa, data traffic shot up almost 98% for the quarter, and Vodacom SA saw an increase in data customers of 6.5% during the period, with 13.2 million using 4G, up 29.4%.

However, the group overall saw its SA customer base drop by 9.9% year-on-year to 39.4 million, mainly driven by a 11.9% decline in the prepaid segment "as gross additions during this period were weak due to store closures and restricted movements."

The international operations, however, all saw a year-on-year uptick in overall customers with growth of 12.6% in DRC, 6.3% in Mozambique, 4.7% in Lesotho and 2.9% growth in Tanzania.

International customers increased 7.1% overall year-on-year, to almost 37.7 million, but quarter-on-quarter the international portfolio actually saw a decline in customers of 919,000 – primarily in Tanzania where a government biometric registration process forced the operator to discontinue customers who did not correctly register their SIM cards.

While underlying growth in voice revenue in the international portfolio was down 11.7% during this period, data customers increased 5.2% to 20 million, with data traffic increasing 44.3%. Usage per customer increased on average 32.5%.

M-Pesa customers increased 3.5% to 14.7 million in the international operations. M-Pesa revenue was up 17%, but when normalized to exclude foreign currency fluctuations, M-Pesa revenue actually dropped 3.1%. Vodacom said M-Pesa revenue was impacted by discounted and free person-to-person (P2P) services in most markets.

"Movement restrictions in several of our markets has also seen trade reduced. This resulted in the value and number of transactions decreasing in the quarter," the company said in its statement.

Vodacom invested R803 million ($48.5 million) in capital expenditure across the international operations to expand its 4G network in order to maintain the data availability during the quarter.

"While I am particularly pleased with the performance of our South African business, we remain cautious about the impact of COVID-19 on our operations and uncertainty about the pace of economic recovery in each of the countries where we operate as disposable income will increasingly come under pressure as a result of rising unemployment and reduced economic activity," Joosub said.

— Paula Gilbert, Editor, 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