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Vodacom profits grow as operator gains three million more SA customers

Johannesburg - Mobile network provider Vodacom grew its data revenue by almost 20% year-on-year to R20.696bn, while its local customer base rose to to 3 million, results for the year ending March 31 2017 showed on Monday.

Headline earnings per share were up 4.5% to 923 cents per share with a final dividend per share of 435 cents, taking the total dividend to 830c/share for the year.

Group service revenue was up 2.3% and group revenue lifted 1.5%, with the South Africa service revenue increasing by 5.6%, aided by strong customer net additions of 3 million, the company said in a statement.

Vodacom CEO Shameel Joosub said the change in pricing to offer customers more value through segmented and personalised offers will continue to sustain revenue growth. 

“Our solid results this year show that we continue to make great progress against these strategic priorities with our performance driven, in particular, by strong customer growth in South Africa, where we added close to three million customers, largely contributing to a 5.6% increase in service revenue growth,” Joosub said. 

Vodacom’s earnings before interest, taxes, depreciation and amortisation grew 2.9% to R31.238bn  with group capital expenditure of R11.292bn, focusing on data expansion and information technology.

READ: Vodacom buys R36.7bn Safaricom stake in Kenya

Vodacom over the year introduced a range of data packages to take on Telkom’s competitive FreeMe data and voice bundles, with Vodacom data revenue growing 19.7% to R20.696bn, now comprising 39.7% of service revenue. 

“In South Africa, customers have responded positively to our segmented marketing approach and concerted efforts to increase bundle adoption engagement, particularly through our ‘Just 4 You’ offers,” Joosub said. 

“This resulted in the sale of almost 1.5 billion bundles, an increase of 34.1%, and ultimately in the increase in our net promoter score lead over our next-best competitor,” he added. 

Joosub said that the sustained demand for data remained a key driver for growth with active data users up 8.3% in South Africa and 29.3% across international operations. 

On Monday, it was also announced that Vodacom agreed to buy a 34.94% stake in Safaricom, giving the wireless operator majority control of Kenya’s biggest company.

Vodacom shares rose 0.25% to R152.49 on Friday, valuing the company at R227bn.


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