A large increase in data users has boosted Vodacom's strong revenue growth in its maiden financial report.
The company released its final results for the year ended 31 March 2009 this morning, following its listing on the JSE yesterday.
The company's strong results seem not to have made an impression on new investors, with its share price at R57 at the time of publication.
Many analysts and investors have been eager to see the reaction to Vodacom's listing. It enjoyed a successful first day on the bourse, overreaching its expected targets. The company's share price closed yesterday at R58, giving it a market capitalisation of R87 billion.
Vodacom has shown strong revenue growth at 14.5%, driven largely by an increase in the data space. The company grew data income by 28% and broadband growth in SA climbed by 80%.
Frost & Sullivan ICT industry analyst Lindsey Mc Donald says data is a market from which Vodacom can expect future revenue growth. “This growth is significant, but - at the same time - it's coming off a relatively small base.”
She adds that Vodacom's advantage in the space is the consumer perception that it is the most reliable mobile Internet service. “We still haven't seen the ramp up in broadband services from fixed-line operators that we would like.”
Despite strong revenue, the company saw a 22% drop in net profit. According to Vodacom CEO Pieter Uys, the drop can be attributed to Vodacom's black empowerment deal, which it completed last year, costing the company.
Uys says Vodacom will focus on improving its market share in the converged ICT arena. The acquisition of StoreTech, during the last financial year, was part of the growth strategy.
Vodacom also invested R100 million into a new data centre expected to house 20 000 possible customers in the converged ICT space. Uys would not elaborate on the growth of the customer base in the data centre; however, he is pleased with the progress of the unit so far.
The converged space will not be limited to the enterprise arena, but will also play a part in Vodacom's consumer services, he adds. The company already runs its popular social network, The Grid, as a converged service.
Another focus area will be a move into Sub-Saharan Africa. Uys says there are no specific areas it is targeting, but Vodacom will look at whatever opportunities come its way.
Mc Donald says Vodacom will have to have a clear strategy for Africa, because MTN and Zain have strong footprints across the continent. “These operators also already have strong value propositions, such as MTN's one rate for roaming in Africa and Zain's One Network. Vodacom will need to offer something unique.”
Alongside many global companies, Vodacom will watch the global economic environment closely. Uys says Vodacom is controlling costs and managing margin pressures as far as it can over the next year.
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