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Johannesburg - Cellular group Vodacom said its revenues from international mobile operations have dropped in the last quarter.
The group released results for the four-month period ending June 2009 on Wednesday, revealing a 12.2% increase in total revenues to R14.2bn year on year thanks to good performance in SA.
International revenues have declined by 8.1%, compared to the same quarter last year. However, Vodacom South Africa managed to increase its revenue by 8.2% year-on-year.
Vodacom CEO Pieter Uys said the group will reduce capex spending in the Democratic Republic of Congo and Tanzania to combat declining revenues in those countries.
"We are not building any additional capacity at the moment," he said.
The group planned to spend some R8bn in Africa, with about R5bn in South Africa and the remainder in its other African operations.
Said Vodacom's trading statement: "Revenue in Tanzania and the Democratic Republic of Congo continued to be affected by weak economic conditions, strong competition and higher excise duties. Excluding the excise duties, revenue from the international operations was down 4.2%."
But it's not all doom and gloom in Africa; "Mozambique and Lesotho delivered strong revenue growth in the quarter," said the group.
The decline in revenue comes in spite of a growing subscriber base. Vodacom said its international operations recorded strong customer growth, up 30% to 12.6 million on the same quarter last year and up 4.9% from 12 million at March 31 2009.
"Churn increased in the Tanzanian and DRC operations due to low tariff offers from competitors. Vodacom Mozambique continued to gain market share and churn reduced by 10.8 percentage points from the previous quarter. Churn is expected to increase in Mozambique in the next quarter following the seasonally higher connections in December 2008," said the statement.
Another challenge facing Vodacom is dissolved average revenue per user rates as Uys said African subscribers increasingly carry multiple prepaid SIM cards for different networks.
He added prepaid user registration is expected to slow growth in its customer base for the remaining two quarters of 2009.
"We expect customer growth to slow in the remaining quarters as customer registration is now required in our three largest markets. We remain focused on maintaining our market share, stimulating usage and containing our costs," he said.
- Fin24.com