Vodacom service revenue falls on Icasa data rules, roaming switch

Vodacom reported a 1.2% year-on-year decline in service revenue in South Africa in the three months to end-June 2019, though a solid performance by its international operations helped ensure the group generated a 3.9% improvement (1.2% normalised) to R17.4-billion.

Total group revenue rose by 4.2% (1.9% normalised) to R21.5-billion. Vodacom added 608 000 customers in South Africa in the quarter, 522 000 of which were prepaid users. The contract customer base in South Africa expanded by a healthy 8.9%.

The telecommunications operator blamed the slide in South Africa service revenue on the “proactive reduction in out-of-bundle data rates, data usage regulations (introduced by communications regulator Icasa) and the transition between national roaming partners” from Cell C to Telkom. Acceleration in the growth in data traffic of 52%, and a 45% jump in revenue from our financial services business were among the key highlights in South Africa from the quarter.

Outside South Africa, Vodacom added 560 000 customers, representing growth of 5.3%. But it was in international service revenue growth where the group excelled, with this number rising by 19.6% (8.1% normalised) to R5.1-billion. The strong performance was underpinned by mobile payments platform M-Pesa and demand for data.

Group data customers increased to 38.9 million, adding 1.3 million in the quarter. M-Pesa revenue increased by 42.7% (28.4%) to R905-million, representing 17.7% of International service revenue.

“Growth from our international portfolio offset the anticipated slower performance in South Africa, which was impacted by new data usage regulations, significant data price cuts and a subdued economy weighing on consumer spend,” said Vodacom Group CEO Shameel Joosub in a statement to shareholders.  — © 2019 NewsCentral Media