Vodacom CEO highlights ‘resilient’ performance in fiscal Q1

5 Aug 2022

Vodacom Group has released its results for the three months ending 30 June 2022, with CEO Shameel Joosub noting that the company delivered a ‘resilient first quarter performance despite the turmoil in financial markets and uncertainty about the recovery of the global economy’. In its fiscal first quarter, Vodacom reported group revenue of ZAR26.056 billion (USD1.559 billion), up 5.2% from ZAR24.779 billion in the corresponding year-earlier period underpinned by growth in the South Africa business, as group service revenue improved to ZAR20.154 billion from ZAR19.165 billion on the back of data revenue growth and new services (e.g. IoT).

In South Africa, total revenue improved by 3.8% year-on-year to ZAR20.268 billion as service revenue rose 3.0% to ZAR24.496 billion on the back of sustained investment into technology and its network. Vodacom highlighted a 5.1% growth in its customer contract base in South Africa, to 6.5 million, and recognition by Tutela, an independent data research company, as ‘the country’s leader in network quality’. In total, South Africa recorded 45.086 million subscriptions at end-June 2022, up 1.1% y-o-y. Of note, the unit reported: ‘Data traffic growth accelerated to 30.2% in the quarter. Data customers of 23.0 million were up 8.6%, representing 63.5% penetration of our one-month customer base. Smart devices on our network were up by 11.5% to 26.4 million. The number of 4G devices on our network increased 11.3% to 18.2 million while the average usage per smart device increased 25.2% to 2.7GB per month. Pre-paid data revenue of ZAR2.6 billion was up 8.3%.’

The Group’s International operations also performed well with service revenues rising by 10.4% to ZAR5.584 billion and total revenue up 9.9% at ZAR6.038 billion. Here, Vodacom Group noted that growth was driven by data revenue, which was up 23.4% on a reported basis, as net subscriber additions reached 946,000 to boost the total to 42.662 million (2Q21: 41.716 million). In its quarterly report, Vodacom confirmed: ‘[International] data revenue was ZAR1.3 billion, up 14.9% and contributed 22.1% of service revenue. The strong performance was underpinned by our network investment in the prior year and targeted campaigns to drive data usage. Data traffic growth was strong at 39.7%, despite the optimisation of free traffic in DRC leading to loss of active data customers. Our data customer base of 19.8 million represents 54.5% penetration of our 30-day active base.’

Financial services also improved by 9.3% on an annualised basis to ZAR2.1 billion, with Shameel Joosub noting: ‘Financial services remains a clear strategic priority for the Group and this business continues to gain momentum, contributing ZAR2.1 billion to service revenue. The segment is driven in the main by our pioneering mobile money platform M-Pesa, which is Africa’s largest by transaction value. Combined with Safaricom, our M-Pesa platform processed USD340 billion over the last twelve months, up 20.2%. 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.’

South Africa, Vodacom Group