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Vodacom boosts profit as it hits 40 million subscribers in SA

Vodacom boosts profit as it hits 40 million subscribers in SA

South Africa's Vodacom Group VODJ.J posted a 1.1 percent rise in half-year earnings on Monday, while net profit increased 7 percent, boosted by the acquisition of Safaricom SCOM.NR .

"We have consistently said throughout the year that we would accelerate the reduction in data prices and address out-of-bundle prices", the group said in its shareholder statement.

Vodacom invested R3.9bn in its network and IT systems in South Africa in the six-month period. Migration to the new "more data" contracts, which have a larger data allocation, accelerated to 25% of the base.

"The sale of smartphones grew by 18.3%, comprising 59.5% of total device sales", the report read. 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.

Underpinning the results were Safaricom's contribution over the last two months of a profit of R349-million and a strong 10.8% expansion of Safaricom's customer base to 29.5-million customers, he said. "In turn, this should continue to drive revenue and customer growth across all markets", Joosub said. The group added 356 000 data users, bringing total data customers to 19.9 million.

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Data revenue comprised 13.6 percent (2017: 13.4%) of global operations' service revenue. It now claims to have 76.7% 4G and 99.3% 3G population coverage, compared to 68.7% 4G coverage a year ago.

Finnish network equipment maker Nokia will trial its 5G technology in South Africa in collaboration with Vodacom Group, the firms said on Tuesday, as they seek to provide faster data delivery. Service revenue declined by 4.8% to R8.3bn.

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. Exchange rate volatility continues to dent reported growth in global operations.

Data revenue declined by 2.7%, but comprised 13.6% of worldwide operations' service revenue. M-Pesa added 1.1 million customers in the first half of the year, reaching 14.8 million. Service revenue growth was further underpinned by strong normalised growth in both data and M-Pesa revenue. "Tanzania remains the leader in global operations with 61.7% of customers using M-Pesa", the report read.

"We will be driving further development of M-Pesa across all markets", added Vodacom.


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