Vodacom has increased its subscriber base, but has experienced a decrease in average revenue per user (ARPU).
The mobile operator, which is 50% owned by fixed-line operator Telkom and 50% owned by Vodafone, says it has 25.2 million customers across its networks operating in SA, Tanzania, Democratic Republic of Congo, Lesotho and Mozambique.
A statement released by JSE-listed Telkom, giving an update for the quarter ended June, said this was a 7.3% increase on the previous quarter. "The growth in the customer base is a result of high gross customer connections of 3.5 million for the quarter," it said.
Its South African operations, which include Vodacom SA, Smartphone, Smartcom and Cointel, saw an increase in the customer base of 6.4% in the quarter. This takes local subscribers to 20.4 million customers, of which 2.5 million are on contract and the balance are prepaid customers.
The contract customer base increased by 5.3% in the period, while prepaid customers - at 17.8 million - increased by 6.3%.
Vodafone recently reported that, at the end of March, it had 10.968 million proportionate users, and 761 000 were added to its share at the end of June. Of the subscriber base, 89.7% were prepaid users, it said.
Spending less
However, blended ARPU declined 12.9% to R121 per month in the period, from R139 a month for the year ended March. Average revenue for contract customers was R526 in the June quarter, 8% off the R572 reported in the year-end results in March. Prepaid customers showed a similar picture, declining 11.6%, to R61 from R69.
This is a result of its penetration into markets that spend less, said Vodacom. Group executive of corporate communications Dot Field noted: "Customers are growing in the lower-end [of the] prepaid and postpaid markets, who spend less, hence the ARPU is less."
The biggest drop off in ARPU, however, came from the community service telephone category, which fell 35.7%, to R1 154, down from the year-end figure of R1 796 a month.
The mobile operator also reported an increase in churn, from 17.7% of its local customer base to 27.6% of the base, an increase of 9.9%. Churn is only measured across contract and prepaid customers. Most of the churn occurred in its prepaid sector, up to 29.9% from 18.8% - an 11.1% increase. Churn among contract customers increased 0.8%, from 10% to 10.8%.
Vodacom said it expected ARPU to increase, as it had altered its active customer rule. This will see 3.5 million customers who do not make use of their Vodacom numbers being discarded from the base. However, this is not expected to have a material impact on revenue, it said.
"It is also expected that normal monthly churn from July 2006 onwards would increase as a result of the activity rule change."
Telkom`s shares closed on Wednesday at R126.80, down from Tuesday`s close of R127.50. Its 12-month high is R165.82. By 9.48am today, the share was up 0.87% at R127.90.
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