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Data revenue grew strongly at 12.8% to R23.4 billion, contributing
42.8% of service revenue. This represents strong growth as we
transform pricing for customers by reducing out-of-bundle spend.
This was achieved by improving customer data usage
notifications, reducing of out-of-bundle rates by as much as 50%,
and introducing more value offers on our contract plans. In the
second half, 12% of data revenue was out-of-bundle revenue,
down from 22% in the first half of last year. Data traffic growth
remains robust at 43.7%. This was enabled through growing our
data network coverage and capacity, as well as focusing our device
strategy on increasing 3G and 4G device uptake. 4G customers on
our network increased 44.8% to 7.3 million, while the average
megabyte per smart device increased 18.4% to 784 MB. Our
bundle strategy continues to resound well with our customers,
who have a choice of buying appropriate bundles based on validity
period or size to suit their needs. Data bundle purchases increased
54.7% to 766 million. Improved in-bundle usage and reduction in
out-of-bundle prices has helped us to reduce the overall effective
price per megabyte by 21.6% this year.
Enterprise service revenue grew 10.8%, now contributing 25.7%
of service revenue. Mobile Enterprise customer revenue was flat,
as the upgrade cycle on the government tender awarded to
Vodacom in October 2016 progressed well, while new sign-ups to
compensate for the greater discount were slower than originally
anticipated. We expect this trend to improve in the year ahead.
Service revenue growth from fixed services increased 55.6%,
driven by the inclusion of wholesale transit revenue (a new low
South Africa
Year ended 31 March
% change
2018
2017
2017/2018
Service revenue (Rm)
54 622
52 071
4.9
Revenue (Rm)
69 967
64 729
8.1
EBITDA (Rm)
28 088
26 815
4.7
EBIT (Rm)
21 124
20 593
2.6
Data revenue (Rm)
23 355
20 696
12.8
Capital expenditure (Rm)
8 884
8 471
4.9
Customers
1
(thousand)
41 635
37 131
12.1
Prepaid customers (thousand)
36 275
32 000
13.4
Contract customers (thousand)
5 360
5 131
4.5
Data customers
2
(thousand)
20 347
19 549
4.1
IoT connections
3
(thousand)
3 628
2 979
21.8
Total ARPU
5
(rand per month)
101
111
(9.0)
Prepaid ARPU (rand per month)
58
62
(6.5)
Contract ARPU (rand per month)
390
408
(4.4)
Number of employees
5 007
5 038
(0.6)
NPS (position relative to competitors)
1st
1st
Service revenue market share (%) #1
50.5
51.0
1. Customers are based on the total number of mobile customers using any service during the last three months. This includes customers paying a monthly fee that entitles
them to use the service even if they do not actually use the service and those customers who are active while roaming.
2. Data customers are based on the number of unique users generating billable data traffic during the month. Also included are users on integrated tariff plans, or who have
access to corporate APNs, and users who have been allocated a revenue generating data bundle during the month. A user is defined as being active if they are paying a
contractual monthly fee for this service or have used the service during the reported month.
3. Internet of Things (IoT) connections, is the remote wireless interchange between two or more predefined devices or a central station without direct relationship with an end
customer, in order to support a specific business process or product.
4. Minutes of use (MOU) per month is calculated by dividing the average monthly minutes (traffic) during the period by the average monthly customers during the period.
5. Total ARPU is calculated by dividing the average monthly service revenue by the average monthly customers during the period. Prepaid and contract ARPU only include service
revenue generated from Vodacom mobile customers.
margin business), connectivity revenue and Cloud and Hosting
services.
EBITDA grew 4.7% to R28.1 billion and delivered a margin of
40.1%. We have contained inflationary pressures on operating
expenses, through cost-saving initiatives under our ‘Fit for growth’
programme, maintaining total operating expense growth of 2.1%,
which is 2.8ppts below service revenue growth. EBITDA margins
have, however, contracted 1.3ppts, impacted by the roaming
agreement with Rain diluting margins by 0.7ppts, as we move cost
of capacity to direct expenses from depreciation; the increased
contribution from lower margin handset sales has impacted
margin by 0.8ppts. EBIT growth of 2.6% was below EBITDA growth
as a result of higher growth in depreciation and amortisation costs,
in line with our capital expenditure guidance to deliver our
network leadership position.
Our capital expenditure of R8.9 billion was focused on widening
our network coverage, improving network performance to support
increased data demand and enhancing overall customer
experience. Significant investment was made in our IT systems
with deep machine learning capabilities aimed at providing a
seamless and personalised customer experience, enabling us to
deliver on our strategic ambition of being the leading digital telco
in South Africa. We have extended our 3G population coverage to
99.4% and 4G coverage to 80.1%, up from 75.8% a year ago.
Vodacom is now the first African operator to extend 4G coverage
to more than 80% of its population.
47
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