Johannesburg - The enforced reduction of mobile termination rates since
March 2010 has chopped almost R400m from the quarterly income of
telecommunications firm
Vodacom Group [JSE:VOD].
On Thursday,
the group reported a 4% increase (to R14.4bn) in service revenues from
its South African operations for the three months to end-June, but said
that it would have been up by 8.2% were it not for the interconnection
reduction which had a R393m effect on its bottom line.
Interconnection
rates are paid when network traffic switches from one network over to
another. Vodacom has more subscribers than any other South African
operator and has traditionally benefited from the rates paid to it by
other networks for connecting calls.
The South African customer
base also declined by 3.1 million to 23.2 million in the quarter,
mainly due to the changes in the disconnection policy of 13 months to
seven months for call-forward Sim cards, Vodacom said.
Excluding
the impact of the disconnection policy, prepaid customers declined by
11.9% year-on-year due to the Regulation of Interception of
Communications and Provision of Communication-Related Information
Amendment Act (Rica), it said.
Better fortunes elsewhereOverall,
the firm reported a 1.1 million increase in group customers for the
period under review, resulting in total group customers of 37.7 million.
Service revenue was up 4.4% and the group also noted a 15.7% rise in its contract customer base.
Group
revenue and service revenue increased in constant currency by 3% and
3.1% respectively - boosted by a 43.2% revenue growth for data services
to R1.35bn.
The South African mobile operations contributed 61.4% of group total mobile customers, and data traffic increased 54.5%.
The
rand strengthened against all the other functional currencies in the
international operations, resulting in lower reported group revenue
growth of 0.7% and service revenue growth of 0.6%. South African mobile
operations contributed 87.2% (March 2010: 87.4%) of group revenue.
The
international operations recorded customer growth of 15.8% year-on-year
to 14.6 million, adding almost one million customers in the quarter
mainly from Tanzania, where the market has responded well to the
newly-introduced tariff plans, Vodacom said.
Revenue in the
international mobile operations in constant currency declined by 0.4%
and, including the effect of foreign exchange movements, revenue
declined 14.5% to R1.922bn.
CEO Pieter Uys said: "This was a
positive start to our financial year, with overall group service
revenue increasing 3.1% in constant currency. Our continued focus on
broadband leadership paid off with group data revenue growing 43.2%.
"Excluding
the impact of mobile termination rates (MTRs), South Africa's service
revenue growth of 8.2% reflected robust growth in data revenue and
gains on the voice side.
"Lower MTRs had a negative impact of approximately R393m on revenue in
the quarter. We pressed ahead with actions to deliver greater value to
customers, launching prepaid promotions and reducing data and voice
contract tariffs."
- Fin24.com