Vodacom Reports 40.5 mil. African Mobile Subscribers

Vodacom has reported a group total of 40.454 million African mobile subscribers by 31 December 2009 across South Africa, the Democratic Republic of Congo (DRCongo), Lesotho, Mozambique and Tanzania. This is a 7.1% increase year-on-year (y/y) from 37.771 million, but a net decrease of 1.134 million compared to the 41.588 million reported in September 2009 (see Sub-Saharan Africa: 9 November 2009: Vodacom Reports 41.6 mil. African GSM Subscribers).

In South Africa, Vodacom reported a 2.5% annual increase to 27.102 million subscribers, but this was a decrease compared to the 28.204 million reported in September 2009. During the last quarter, post-paid subscribers increased by 12.5% to reach 4.349 million, but pre-paid subscribers dropped by 1.3 million to 22.636 million following the implementation of the Regulation of Interception of Communications and Provision of Communication-Related Information Act (RICA).

The reported subscriber totals are based on the total number of customers registered on Vodacom’s network that had not been disconnected, including inactive customers, by the end of the period indicated. Vodacom added that it expects mobile termination rates to be reduced from as soon as 1 March 2010 (see South Africa: 13 November 2009: South African Government and Operators Agree New Mobile Termination Rates).

In DRCongo, Vodacom reported 3.522 million subscribers by 31 December 2009, a 12.9% decrease y/y and a net decrease of 882,000 compared to the 4.404 million reported by September 2009. This was due to Vodacom changing the distinction between 'active' and 'inactive' subscribers, and disconnecting inactive subscribers in DRCongo after a period of 90 inactive days rather than 215. As a result, Vodacom says that customer growth of 17.9% for international operations understates actual growth of 27.2%.

Outlook and Implications

The Vodacom group’s revenue for the quarter grew by 6.0% to 15,425 million rand (US$2.032 billion), compared to 14.556 million rand in the same quarter of 2008. Revenue from South Africa increased by 7.5% to 13,439 million rand (US$1.771 billion), with Vodacom noting that revenue from data grew by 35.2% due to increased penetration of mobile internet and PC connectivity. Broadband customers grew by 48.8%.

Revenue from the acquisition of Gateway Communications added 693 million rand (US$91.3 million) to the group's total during the quarter. However, revenue from international operations decreased by 33.4% to 1,394 million rand (US$183.7 million) during the quarter from 2,093 million rand in the same period in the previous year, due primarily to the relative strength of local currencies against the rand. Vodacom in Tanzania and DRCongo saw a revenue decrease in rand due to exchange rate translations, continuing weak economic conditions, intense competition and higher excise duties.

“This has been a positive quarter for Vodacom, featuring solid overall revenue growth and continued progress in building our data business,’ said Vodacom chief executive Pieter Uys. "Despite a challenging economic environment and the continued impact from RICA, our South African business posted a 7.5% increase in revenue. The actions we have taken in our international businesses have shown positive results in the form of improved market positioning."