Vodacom Group on Thursday reported a 5.2% year-on-year improvement in quarterly revenue on the back of a “resilient” performance in its main market, South Africa, where service revenue rose by 3%.
Revenue for the quarter ended 30 June 2022 was US$1.52 billion, Vodacom said. Group service revenue rose by 5.2%, supported by growth in data revenue and new services such as internet of things (IoT).
Service revenue in South Africa grew by 3% (from 3.3% in the usually strong March quarter), supported by an improved performance in consumer contracts and continued growth in new services such as financial and digital services, fixed lines, and IoT.
South African revenue was R20.3 billion (about US$1.2 billion), up by 3.8%, helped along by good growth in equipment sales.
South African mobile contract customer revenue increased by 5.8% to R5.5-billion (US$321 million). During the June quarter, Vodacom South Africa increased contract pricing by between 3% and 5% due to “inflationary cost pressures”. Mobile contract Arpu, or average revenue per user, rose by 0.7% to R294. This was impacted by “repricing pressure associated with the government contract for mobile services within Vodacom Business”.
Vodacom South Africa added 52,000 contract customers, with the base at 6.5 million, up 5.1% year on year.
The prepaid segment delivered a “resilient performance” despite higher food and fuel inflation and delays to social grant payments. Prepaid revenue increased 1.7% to R6.2-billion (US$362 million). Prepaid Arpu was R55, up 1.9% quarter on quarter.
Data traffic growth accelerated to 30.2%. Data customers of 23 million were up 8.6%. Smart devices on the network in South Africa were up by 11.5% to 26.4 million. The number of 4G devices rose by 11.3% to 18.2 million units and the average usage per smart device increased 25.2% to 2.7GB/month.
Service revenue from financial services in South Africa was up 4.5% to R672-million, with a customer base of 13.1 million. Revenue growth was supported by strong growth in Vodacom’s insurance portfolio, with the number of policies up 8% to 2.4 million.
“Our Airtime Advance product remained a key contributor to financial services revenue, with volumes improving through the quarter as we updated bundle pricing. We advanced R3.1-billion in airtime, amounting to 44.7% of total prepaid recharges,” the group said.
Capex in South Africa was R2.4-billion, a moderation from the previous quarter, impacted by what Vodacom called “phasing”.
“Looking ahead, we will leverage our newly acquired spectrum assets in South Africa to improve 4G services and invest incrementally into 5G infrastructure.”
Vodacom said it is still waiting for approval from the competition authorities of its plan to acquire 30% of the fibre assets of CIVH, the parent company of Vumatel and Dark Fibre Africa. It is also awaiting regulatory approval in Egypt of its offer to buy a 55% stake in Vodafone Egypt, which it said it expects to receive in the “near term”.