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Our
revenues
Key
revenue
differentiators
Most of our revenue comes from
selling mobile data, voice and
messaging services to individual
consumers, with the balance
coming from the sale of these
mobile services, coupled with
connectivity and network provision
services to our Enterprise
customers. The recent decline in
mobile voice revenue has been
more than offset by significant
growth in data revenue, fuelled by
the increased uptake of smart
devices, improved network
coverage, more affordable data
bundles and enhanced digital
content. Our Vision 2020 strategy
aims to diversify these revenue
streams even further in key verticals
such as financial services, IoT, digital
services and Enterprise.
•
Consistent investment in infrastructure
resulting in being rated first in network
quality in four of our five countries
of operation.
•
A diverse and widespread distribution
network across all our operations.
•
Industry-leading customer value
management systems, people
and processes.
•
Effective use of Big Data for
personalised offers to customers to
better suit their needs and behaviours.
•
Competitive and compelling product
offerings targeted by segment.
•
Ability to offer vertically
integrated solutions.
•
M-Pesa, Africa’s largest mobile
payment platform.
•
Leveraging off global enterprise
relationships for pan-African
service delivery.
•
Best-in-class customer service
support systems.
•
Ability to leverage off our relationship
with Vodafone, driving global best
practice in performance.
Our
costs
Key
cost
differentiators
We have a strong track record of
optimising expenses and converting
revenue into cash flow. We have
achieved significant results in
limiting cost growth through our ‘Fit
for growth’ programme, managing
staff expenses, publicity spend and
other operating expenses. This has
been enabled through an improved
culture of cost containment across
the business. Our resulting strong
cash flow helps us to maintain a
high level of capital re-investment,
primarily in our network
infrastructure to maintain our
leading position in network
coverage, call quality and data
speed in all our markets. In addition
to investing in the future prosperity
of the business, cash generated
from our activities allows us to
maintain shareholder returns, with
our dividend policy of at least 90%
of adjusted headline earnings
before accounting for any impact
from the Safaricom acquisition and
a flow through of any Safaricom
dividends, net of withholding tax.
•
Leveraging global best practice on cost
optimisation through our ‘Fit for
growth’ programme where we benefit
from and share best practice with
Vodafone.
•
Benefiting from the purchasing power
of Vodafone Procurement Company.
•
Consistent investment in network,
delivering continuous improvement in
operating costs through more efficient
technologies and network innovation.
•
Robust governance processes for
approving investments and reviewing
product, cost and investment
decisions.
Our investment case
g
g
We have a leading network and strong brand presence in each of our markets.
g
g
Each market has a young, growing population with significant scope for further data and digital
adoption, in both the Consumer and Enterprise segments.
g
g
We have a demonstrated reputation for strong management execution and capital allocation,
delivering best-in-class return on capital employed (ROCE).
g
g
We have a strong balance sheet and good cash flow generation to support further investment.
g
g
The global shift to digital is presenting significant market opportunities, that telcos are particularly
well placed to benefit from both in Consumer and in digitising the business for Enterprise.
g
g
We are globally recognised for our leadership in providing mobile financial services and innovative
digital services in an emerging market context.
g
g
We have embraced Big Data and machine learning to drive revenue growth through personalised
offers to customers.
Despite the strong drive to reduce
the price of voice and data, we see
significant opportunity for sustained
revenue growth by protecting and
growing traditional service of voice,
data and messaging across our core
markets, while driving the uptake in
new verticals, including financial
services, entertainment, fibre and
building on our existing well-
established differentiators.
Our profit
formula
We generate profit by
efficiently utilising
mobile and fixed-line
assets to provide our
Consumer and
Enterprise customers
with voice, data,
messaging and
related services.
Our competitive
differentiation lies in
the quality of our
network, the nature of
our products and
services, the extent of
our regional footprint,
the quality of the
relationships we have
with key stakeholders,
and our proven ability
to manage our cost
base.
Howwe
create value
Group service revenue
composition
2018
2017
■
Consumer
service revenue
77%
78%
■
Enterprise
service revenue
23%
22%
2018
Increase in
service revenue
+5.1%*
Group total expenses
composition
2018
2017
■
Direct expenses
63%
61%
■
Other opex
23%
24%
■
Staff expenses
10%
11%
■
Publicity expenses
4%
4%
2018
+6.8%
Increase in
total expenses
09
Our business
Our performance
Our governance
Administration