Vodacom’s South African operations posted a healthy rise in revenue growth, fuelled by increased demand for connectivity, helping the group record strong results for the year ended March 2021.
The mobile operator says in SA, service revenue grew by 7% to R56.4 billion on the back of increased data usage, with its successful summer campaign and demand for financial services collectively helping Vodacom.
As a group, in the year, Vodacom’s revenue was up 8.3% (7.4 %) to R98.3 billion. The company also added 8.2 million customers, to serve a combined 123.7 million clients across the group, including Safaricom.
Vodacom’s total financial services customers, including Safaricom, were up 12.9%, or 6.6 million to 57.7 million, while earnings per share rose by 4.2% and headline earnings per share surged 3.7%.
For the year, Vodacom declared a final dividend of 410cps.
Turning to SA, Vodacom reported blowout full-year results, buoyed by double-digit data usage growth.
The company says tariff reductions of up to 40% at the beginning of the financial year and the successful launch of Vodabucks were also instrumental in pushing the group positively.
CEO Shameel Joosub says the growth was fuelled by increased demand for connectivity, particularly in prepaid and Vodacom Business, and new services such as Internet of things (IOT) and financial services.
Furthermore, he says, the performance was enabled by investments in new services, networks and digital IT capabilities, such as business and artificial intelligence (AI).
In the year, data traffic increased by 55.6%, with Vodacom saying the growth trend normalised in the last two quarters of the financial year as lockdown restrictions eased.
However, data customer net losses were 0.2 million in the year, ending on 21.7 million customers, as Vodacom focused on optimising gross additions.
The company says smart devices on its network were up by 9.5% to 23.2 million, while 4G devices increased by 22% to 15.7 million.
It adds that the average usage per smart device increased by 38.9% to 2.1GB per month.
Turning to fibre, Joosub says: “We accelerated our fibre rollout during the year, more than doubling the total number of homes and businesses connected to 126 765. Our own fibre passed 146 401 homes and businesses as at 31 March 2021.”
In the year, Vodacom SA mobile contract customer revenue increased by 5% to R20.8 billion, which the company says was a resilient performance given the economic backdrop.
Within the mobile contract segment, it says, Vodacom Business continued to deliver growth in the fourth quarter, while consumer contract revenue remained broadly unchanged year-on-year.
Joosub explains: “We recorded positive contract customer net additions of 133 000 in the year while ARPU [average revenue per user] increased by 2.1% (adjusted growth 1.4%1) and 7% (adjusted growth 3.1%) in the year and the fourth quarter, respectively.
“In the prepaid segment, mobile customer revenue increased by 8.5%. Prepaid net additions for the year were a substantial 2.6 million, reflecting our summer campaign’s success and new behavioural loyalty programme – which provided more reasons to consume and facilitate our active days’ management initiative.”
Further, Joosub says ARPU increased 13% to R61, supported by increased usage of connectivity and digital services and the accessibility of airtime via the Airtime Advance product.
In the fourth quarter, Vodacom says, Airtime Advanced amounted to 43% of total prepaid recharges in the quarter (4Q20: 35.9%).
The financial services unit was another star performer for the year for South African operations.
Service revenue generated from financial services was up by 18.9% to R2.4 billion, while customers increased by 15.4% to 13.3 million.
“Our financial services’ result reflects our execution capability in this space. Revenue growth was underpinned by our Airtime Advance product, where we advanced R12 billion in airtime during the year, an increase of 21.1%. The number of Airtime Advance customers increased 17.3% to 10.8 million. Insurance policies increased by 8.3% to 2.1 million,” says Joosub.
Similarly, Vodacom Business service revenue increased by 11.3% to R15.9 billion, which the company says was supported by its innovative work-from-home solutions.
Vodacom Business fixed service revenue grew by 6.5%, excluding wholesale transit, supported by strong growth in cloud, as well as hosting and connectivity revenue. IOT connections increased by 6.4% to 5.6 million, with revenue growth at 32.8% to R1.1 billion.
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