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Vodacom's strategy of maintaining a network advantage and delivering value for money continues to reap rewards, despite a low-growth economic environment in South Africa and short-term impacts from customer registration requirements within International operations.
The Group delivered solid service revenue growth of 5.3%, led by a 2.3 million increase in active customers since March 2016, mostly in South Africa.
Shameel Joosub, Vodacom Group CEO, had this to say. 'In South Africa data remains a key contributor to growth, driven by a high demand for data services. We are actively driving down the cost of data encouraging more customers to use bundles in order to maximise the value they receive for their money. We assist our customers to remain in-bundle and save money through notifications. This has resulted in greater momentum in bundle usage growth, with 9.3 million customers now buying more than 223 million data bundles. In addition, as a result of our efforts to make data more affordable, the effective price per megabyte has declined by 13% in the period or 61% over the past four years. Voice price per minute also declined by 14.3% or 52% over the past four years. These figures show that our pricing transformation strategy, adopted three years ago, is working to deliver improved value to all South Africans'.
'We believe that the great offers available through our personalised ‘Just 4 You’ platform has improved the value perceptions with customers and contributed to the strong 5.7% growth in active customers.'
'We are very pleased with Enterprise revenue growth of 8.9%¹. We have won significant contracts from corporate customers and in the public sector. A major highlight includes securing the national and provincial government departments’ mobile voice and data communications contract for a period of four years.'
'We have intensified our focus on customer service through our CARE initiative which, as a result of our investments, has further secured a significant lead in terms of Net Promoter Scores, which measures customer satisfaction over our next-best competitor. We are compensating our customers for calls which are dropped on our network to support our claim of being the “best network”.
'As expected, our International operations have been impacted by customer registration requirements. Nonetheless, we witnessed encouraging net additions to our active customer base in the second quarter while M-Pesa revenue achieved stellar growth of 36.8%. There are now 10.9 million customers using M-Pesa in our International operations. Our network advantage has provided us with flexibility when navigating our International operations through these short-term pressures and we remain squarely focussed on the long-term potential of our International businesses. Nonetheless, I would note the deterioration in the macroeconomic conditions both in the DRC and Mozambique which we are monitoring closely.'
'With prices coming down and data usage growing rapidly, networks require continuous significant capital investment to provide greater capacity and coverage. We invested R5.7 billion into our networks in the first half of the year. Over the last three years, across all our operations the total investment was a massive R37 billion.'
Group service revenue up 5.3% (4.5%*) and Group revenue up 4.1% (3.5%*)
South Africa service revenue increased 5.6%, aided by a strong growth of 1.5 million active customers in the period
International operations’ service revenue grew 5.4% (2.3%*); impacted by customer registration processes
Group data revenue up 18.7%, supported by strong network investment
Group EBITDA grew 4.1% (5.6%*) to R15 278 million with margins flat at 38.1%
Group capital expenditure of R5 714 million, focused on improved 3G and 4G coverage
Headline earnings per share (HEPS) flat at 440 cents per share. Negatively impacted by a tax adjustment in Tanzania and foreign currency impacts. Excluding these and the prior year loss from associate, HEPS grew 3.5%
Interim dividend per share of 395 cents