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Vodacom [JSE: VOD] reported a 3% increase in revenue for the six months to end-September, with headline earnings per share up 18.9% compared to the same period last year.
The large earnings increase was due in part to the lower base last year, when its profit was hit by once-off costs related to a BEE transaction.
Vodacom now has 115m customers, with growth of 2.7m customers in Safaricom. Vodacom bought a stake in Safaricom, Kenya’s largest mobile operator, two years ago.
In South Africa, it added 691 000 customers.
Vodacom reported that its revenue from contract customers in South Africa declined 2.5%, while average revenue per client fell 10.5%. Prepaid customer revenue declined 2.1% as a result of the 60% decline in out-of-bundle data revenue.
But Vodacom said that it saw an increase in data usage in recent months after a decline in South Africa service revenue in the first three month of its financial year. More than one million people have now made video-on-demand purchases.
International operations saw service revenue growth of 15.5% “in a period characterised by macro and political stability and high demand for data and M-Pesa services”, Vodacom said. M-Pesa facilitates cellphone-based money transfer and loan services.
M-Pesa customers in markets outside of South Africa now process more than $2.8 billion (R41bn) a month in transactions through the service.
Vodacom declared an interim dividend of 380c per share. It share price was down more than 4% by late-morning trading on Monday.
South Africa remains the core of the group, generating 80% of revenue, said Old Mutual Private Client Securities' Tasneem Samodien in a response to the results.
"With aggressive capital expenditure over the past two years, Vodacom will maintain its network leadership in this key market. The group’s investment into big data analytics, digitising the customer experience and concerted efforts to develop a superior customer experience continue to advance Vodacom’s dominance in the sector."
