Vodacom revenue growth likely to taper


After an exceptional strong third quarter, driven by strong growth in data customers and benefiting from massive infrastructure investment, Vodacom – South Africa’s biggest mobile phone operator is likely to saw its revenue growth slightly taper in quarter four. By Gugu Lourie

In the third quarter to end-December 2015, Vodacom posted a  14.5% rise in active data customers to 30.3 million boosted by an increase in sales of affordable smart devices.

As a result the mobile operator, which is majority owned by British mobile giant Vodafone, saw a 27.5% increase in data revenue to R5.5 billion, due to higher demand for high speed mobile data across its markets in South Africa, Mozambique, the Democratic Republic of Congo and Lesotho.

Vodacom – which competes with MTN, Millicom, Orange and Orascom across the African continent, also reported a 6.8% rise in active customers to 65.2 million pushing its total revenue to R22 billion, reflecting a 8.7% hike compared to the previous period.

But the company warned investors on Wednesday that the fourth quarter may be tough.

“We expect revenue growth to taper slightly into our last quarter of the financial year due to a stronger prior year comparative and a weaker outlook for the consumer in South Africa due to the drought and weaker exchange rate,” said Shameel Joosub, Vodacom Group CEO.

However, Vodacom’s future outlook remains promising as the telco remains focused on expanding its network to accommodate its growing subscriber numbers.

In the third quarter to end-December, Vodacom invested  R9.5 billion on improving its infrastructure across all its operations in the nine months.

“We have expanded our network coverage and increased data speeds to secure network leadership,” said Joosub.




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