Vodacom’s 1H14 domestic service revenue falls on the back of lower MTRs

10 Nov 2014

South Africa-based Vodacom Group, part of the Vodafone Group, has published its financial results for the six months ended 30 September 2014, reporting a 2.3% year-on-year increase in revenues, to ZAR37.546 billion (USD3.34 billion), up from ZAR36.688 billion in the corresponding period of 2013. Service revenues from international operations reached ZAR7.366 billion, up by 13.0% y-o-y on a reported basis, while South African operations generated a total of ZAR23.437 billion, representing a 1.3% decrease on the ZAR23.747 billion reported in 1H13, mainly due to 50% cut in mobile termination rates (MTRs), which negatively affected domestic service revenues by ZAR1 billion. EBITDA for the six-month period meanwhile reached ZAR12.993 billion, a 1.7% decrease y-o-y on the ZAR13.221 billion reported in 1H13.

In operating terms, the group added seven million net new users over the past twelve months to take its total subscriber base to 60.980 million, which includes 32.613 million in its domestic market – up 8.2% year-on-year – and 28.367 million across its international markets: Tanzania (11.316 million), Democratic Republic of Congo (DRC, 11.003 million), Mozambique (4.913 million) and Lesotho (1.135 million). Further, Vodacom said that it has added around 1,000 Long Term Evolution (LTE) sites in its domestic market to bring the total to nearly 2,000 LTE-enabled sites, while the number of base transceiver stations (BTS) capable of supporting 3G technology increased by 745. Vodacom pointed out that 76.3% of the BTS are connected to its ‘self-provided high capacity transmission network’ and that it has completed a Radio Access Network (RAN) upgrade programme.

Shameel Joosub, Vodacom Group CEO, added: ‘We have faced tough macroeconomic conditions in all markets, increased competitive intensity, and have also seen a significant impact from lower MTRs in South Africa … To clearly differentiate Vodacom’s services, we invested ZAR4.1 billion in the network in South Africa. We added over 1,000 new LTE base stations and 745 new 3G sites. This additional capacity supported the 18% increase in outgoing voice traffic and 75% increase in data traffic. This investment also positions us well to capitalise on data demand which is expected to accelerate as the penetration of smart devices increases. We also completed a six-year project to replace all of our base station radio equipment across the country, meaning that we’re 4G-ready countrywide and just need access to sufficient spectrum to make it operational.’

Congo, Dem. Rep., Lesotho, Mozambique, South Africa, Tanzania, Vodacom Congo (DRC), Vodacom Group, Vodacom Lesotho, Vodacom Mozambique, Vodacom South Africa, Vodacom Tanzania, Vodafone Group