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.


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


Hot startup of the month: SA's Snode

This month's hot startup is South African company Snode, which is applying a data-driven approach to cybersecurity.


Twitter announces first African office in Ghana, begins hiring

Twitter has announced it is planning to open an office in Accra, the Ghanaian capital – the first in Africa for the social media giant.

More Innovation hub

Guest Perspectives


Factors influencing fintech adoption in Nigeria

By Yusuf Opeyemi Akinwale and Adam Konto Kyari

This article is a collaboration with the African Journal of Science, Technology, Innovation and Development and explores the factors impacting the adoption of financial services technology in Lagos, Nigeria.


Omdia View: March 2021

By Omdia Analysts

Omdia's analysts provide context and analysis to the biggest stories making headlines in Africa during March 2021.

More Guest Perspectives

Flash poll

All polls

AfricaCom perspectives


Digital inclusion as a catalyst for economic empowerment: Mastercard's Imelda Ngunzu

Mastercard's Imelda Ngunzu talks to Connecting Africa about how digital payment solutions and mobile money are transforming the lives of small business owners, women and marginalized groups in East Africa.


Accelerating women in STEM: In conversation with GirlCode's Tinyiko Simbine

GirlCode co-founder and CFO Tinyiko Simbine talks about why it's important to help girls and young women excel in science, technology, engineering and mathematics (STEM) fields.


How Poa Internet is unlocking meaningful connectivity in East Africa

Poa Internet's CEO Andy Halsall shares his views on what it takes to develop last-mile connectivity and get Africans online in a meaningful way.

More AfricaCom perspectives

Latest video

More videos

Upcoming events

East Africa Com
May 11-12, 2021
Virtual Event
North Africa Com
July 13-14, 2021
Virtual Event
Asia Tech x Singapore
July 13-16, 2021
Marina Bay Sands, Singapore
Africa Tech Festival
November 8-12, 2021
Cape Town, South Africa
More Upcoming events

Partner perspectives

The moving target that is telecoms fraud
By Clémentine Fournier, Regional VP Sales, Africa, BICS

How mobile operators in Africa can address signalling threats and secure the network
By Katia Gonzalez, Head of Fraud and Security at BICS

SD-WAN and satellite – how MNOs and telcos can enjoy the best of both worlds
By Ofer Asif, SVP BizDev, marketing and strategy at Spacecom

All Partner Perspectives

Sponsored video

More videos

Like us on Facebook

Newsletter Sign Up

Sign Up