Vodacom's M-Pesa ambitions heat up post Safaricom transaction

Logo of Vodafone

Logo of Vodafone

The South Africa-based telecommunications company posted a net profit of 6.85 billion rand ($476.1 million) for the six months ended September 30, compared with ZAR6.44 billion a year earlier. Voice revenue declined by 4.8%.

Headline earnings per share rose just 1.1% to R4.45, after issuing 2.33.5m shares to secure interest in Safaricom, which contributed R349m profit in the first two months since it was acquired.

The company said it gained 2.9 million local customers during the period, taking the network to 40 million South African subscribers for the first time.

Vodacom, which is still being investigated by the Competition Commission for suspected market dominance, declared an interim dividend per share of 390 cents, slight lower than the previous year.

Data revenue in South Africa grew by 15% to R11.4bn, contributing 42.6% of service revenue, surpassing the contribution from voice for the first time, Vodacom said. "In turn, this should continue to drive revenue and customer growth across all markets", Joosub said. This was driven by both data and M-Pesa revenue.

"Without new spectrum we are forced to build more base stations to meet data growth demand". Data bundle sales grew by 55.5% to 347m.

"These are promises that we have delivered on, with effective data prices decreasing by 24.2% during the six-month period". Data revenue declined by 2.7 percent, with normalised growth of 6.6 percent, supported by an increase of 1.8 million data customers, to 14.8 million, up 23.3 percent.

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"Additional spectrum will allow us to invest more efficiently and accelerate our rural coverage programme".

Customer growth for this service remains strong with 56% of customers using the service in Mozambique, 35.3% in Lesotho and 22.2% in the DRC.

Data revenue declined by 2.7%, but comprised 13.6% of worldwide operations' service revenue.

Data revenue comprised 13.6 percent (2017: 13.4%) of worldwide operations' service revenue.

During the first half of the year, on average, R24 billion was processed monthly through the M-Pesa system, the company said.

Vodacom said Tanzania remains the leader in worldwide operations with 61.7% of customers using M-Pesa.

"We will be driving further development of M-Pesa across all markets, expanding our enterprise opportunity across East Africa, and driving big data initiatives across the two organisations", Joosub said.

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