Publications
Partners
- For more financial news, go to the News24 Business front page.
SA's largest mobile operator Vodacom saw a double-digit increase in revenue for its third quarter to end-December, boosted by its new Egyptian business, as well as a surge in fintech revenue.
Group revenue increased 15% to R30.7 billion to end-December, with financial services revenue jumping almost 31% to R2.6 billion, partly due to double-digit growth in insurance sales and its Airtime Advance product in SA. More than 10 million South Africans have signed up for the product, which allows them to get cash and data - which they pay for later - in advance, at a small fee.
Downloads of its "super app" VodaPay reached 4.5 million, up 1 million from the prior quarter. The super app was developed with Chinese e-commerce giant Alibaba, and offers digital financial services as well as online shopping and lifestyle tools. The number of international merchants on the app jumped fourfold to 158 000 over the past quarter.
Vodacom, like competitor MTN, is pushing African financial services hard as it looks to leverage new technology to offer services to those without access to traditional banking.
In part, this informed its move into Egypt, where almost three quarters of the population is unbanked.
In December, Vodacom finalised the R43.6 billion deal that will see it own Vodafone's 55% stake in Vodafone Egypt. The Egyptian business already contributed R1.8 billion in service revenue in Vodacom's third quarter.
The deal was the largest in Vodacom's history, with CEO Shameel Joosub saying on Tuesday that it has cemented the group as a leading Pan-African technology company with significant growth prospects, given its population reach now exceeds 500 million.
Vodacom estimates that Vodafone Egypt controls almost 44% of the mobile revenue in that country. The Egyptian company has more than 45 million customers.
Excluding the effect of currency volatility, and Egypt, Vodacom's revenue rose almost 5%, with normalised international earnings rising 4.5%.
However, revenue in its mobile money service M-Pesa rose just over a third, boosted by its ongoing 4G rollout.
The group's international customer base grew 4.3 million to 48.1 million during the quarter, while in SA, customers fell by almost 1 million to 44.67 million, amid a cleanup of non-revenue-generating accounts.
SA service revenue increased 3% to R15.4 billion.
"In addition to delivering value to shareholders by ensuring the smooth integration of Vodafone Egypt into the Vodacom Group, we remain firmly focused on our purpose of connecting people for a better future and, in particular, assisting customers impacted by cost of living constraints," said Joosub. This included the group's recent summer campaign, where Vodabucks reward points were convertible into cash and could be used for purchases on the VodaPay super app.
Vodacom's shares were down 0.3% to R122.22 in morning trade on Tuesday, having fallen almost 3% so far in 2023.
Click here for more details on Vodacom's shares and other info.
