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.

Business of Tech

Vodacom reports 'resilient' quarterly growth

Article Image
Vodacom Group has reported good quarterly revenue growth on the back of "a resilient performance in South Africa" and is moving forward with plans to create a standalone "TowerCo" in the country, of which it says it will own 100%.

On Thursday, Vodacom reported 5.2% year-on-year (YoY) growth in group revenue, to 26.1 billion South African rand (US$1.52 billion) for the quarter ended June 30, 2022. The operator's international service revenue increased by 10.4%, supported by data revenue growth and a weaker rand, while the home market of South Africa grew service revenue by 3%.

"Vodacom Group produced a resilient first quarter performance despite the turmoil in financial markets and uncertainty about the recovery of the global economy, as a result of COVID-19 and the Russia-Ukraine conflict. Inflation continues to accelerate in most of the markets where we operate, which means that the cost of living has climbed," Vodacom Group CEO Shameel Joosub said in a statement.

The international portfolio includes operations in Tanzania, Mozambique, Lesotho and Democratic Republic of Congo (DRC), while Vodacom's investment in Safaricom in Kenya is reported separately.

Service revenue for the international operations grew to R5.9 billion ($344 million), underpinned by the 11.8% increase in M-Pesa revenue and a 23.4% rise in data revenue.

"A key focus for our international portfolio is digital inclusion through smartphone adoption and data usage, supported by our 20 million strong data customer-base. Smartphone penetration across International improved to 33.5% from 31.8% a year ago as we continue to leverage partnerships with global tech firms and innovative financing options to support our pledge to enable a digital society," Joosub said.

M&A momentum

Joosub said the operator was making progress on a strategy to optimize its assets.

"We are in the process of establishing a separate legal entity for our South African 'TowerCo' that will be 100% owned by Vodacom Group and intend to announce the Managing Director of the business in due course," he said.

He said that Safaricom Ethiopia was also making excellent progress for its commercial launch next month and reiterated what Connecting Africa previously reported: that Safaricom Ethiopia would launch first in the city of Dire Dawa and then roll out to 24 other cities, including Addis Ababa in the months that follow.

There was no real update on Vodacom's purchase of a 55% stake in Vodafone Egypt for around R41 billion ($2.4 billion), except that the telco expects to receive Egyptian regulatory approval "in the near term."

Vodacom is also still awaiting regulatory approval to acquire a 30% stake in CIVH's fiber assets in SA and said it expects this transaction will conclude in the current financial year.

Fintech flow

Joosub said financial services remains a clear strategic priority for the group and the business continues to gain momentum, with revenue up 9.3% YoY for the quarter. Financial services now contribute R2.1 billion ($122.5 million) to overall service revenue.

The segment is driven mostly by mobile money platform M-Pesa, which is Africa's largest by transaction value. Combined with Safaricom, the M-Pesa platform processed $340 billion over the last 12 months, up 20.2% YoY.

"Looking ahead, a further meaningful 43% reduction to mobile money levies in Tanzania from July 2022 bodes well for M-Pesa's contribution to financial inclusion in the country," Joosub said.


Want to know more about telco financials, regulation and deals in Africa? Check out our dedicated Business of Tech content channel here on Connecting Africa.


He added that the VodaPay super app in South Africa had seen good momentum since its launch in October 2021. The app had 2.8 million downloads and 1.9 million registered users by the end of June 2022.

"Given VodaPay is a precursor to M-Pesa's evolution and further strengthens our fintech position across our footprint, we remain confident about the growth outlook of financial services," the CEO concluded.

Related posts:

*Top image is of a smartphone on the Vodacom network. (Source: Paula Gilbert)

— 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