[ad_1]
The volume of Data traffic flowing through the Vodacom network in South Africa increased 66% in the year ending March 31, 2020, after price reductions led to greater “elasticity” in demand from carriers. consumers.
The trend accelerated in the fourth quarter (January-March 2020), the company said, and may even accelerate as a result of work-from-home measures amid the Covid-19 pandemic.
“We ended the year with data customers with a 9.7% increase to 21.9 million and smartphone users with an 11.8% increase, of which 73.3% are 4G customers,” said Vodacom. “The number of 4G devices on our network increased 34.5% to 12.9 million, while the average usage per smart device increased 56% to 1.5GB.”
He said he is confident that the elasticity will continue after the price reductions agreed with the Competition Commission after the end of the financial year.
South African service revenue grew 2.3% despite a tough economic environment, out-of-package fee cuts and the implementation of new regulations that affected usage and out-of-package revenue.
Excluding the one-time benefit of R389 million from the change in revenue deferral methodology in the prior year and the current year change in mobile termination rates (MTR), the underlying growth for the year was 3.3% . Revenue for the fourth quarter grew 3.9% (adjustment of 5.1% for MTR and deferral of the previous year) maintaining the commercial momentum of the previous quarter. “
Prepaid rejections
However, prepaid customers decreased 5.6%, primarily as a result of continual optimization of gross additions to improve base quality.
“This has resulted in one-month active clients remaining stable, evidencing this improvement. The elasticity of use in the data has helped offset the decline in out-of-package revenue, resulting in average revenue per user (Arpu) returning to growth in the fourth quarter. ”
In the contract segment, customer revenues decreased 0.1%. Excluding the impact of revenue deferral from the previous year, contract customer revenue increased 1.9%. Contract subscribers grew 4.2% to 6.1 million.
Business customers increased 12.8%, with a significant increase in the last two weeks before the implementation of the blockade in South Africa, as companies purchased services to allow their employees to work from home.
However, price cuts in the segment due to “competitive pressures” and new, lower-value, data-only contracts resulted in Arpu declining 7.9% or 6.1%, excluding the impact of deferred revenue from the previous year.
Other highlights of South Africa’s full-year results include:
- Fixed line revenue is up 8.5%, supported by strong growth in the cloud and hosting and connectivity revenue. Vodacom more than doubled the number of fiber-connected homes and businesses to 61,427, with its own fiber now exceeding 104,000 homes and businesses.
- IoT connections increased 17.2% to 5.3 million, with revenue growth of 38.5%.
- A margin improvement of 1.8 percentage points in the second half of the year as service revenues returned to solid growth.
- Capital expenditure of R9.9 billion, with significant money earmarked to purchase batteries and backup power to remain resilient during periods of prolonged charge shedding.
Addressing the impact of Covid-19, Vodacom said that the strength of its balance sheet will help cushion the impact of the expected economic recession in the short to medium term. Ninety percent of its debt is denominated in rand, which limits exposure to the foreign currency.
“We maintained a market-neutral debt structure between floating and fixed debt, allowing us to participate, with half of our floating debt, in lower interest rates, while the other half of fixed debt protects against significant adverse interest movements, “he said.
“We believe that continuing to invest in our network, IT and new platforms such as financial services is important during this period and we will maintain our flexibility regarding the amount of capital expenditures and their allocation to different priorities considering the effects of Covid-19 about local economies in our markets.
“As the effects of the Covid-19 pandemic continue to unfold, the prospects for the economies in which we operate are uncertain. We will be postponing the issuance of medium-term objectives, until the moment we are more clear about the economic outlook and the effect on our business and operations in the medium term. While the situation remains challenging, we believe that the strength of our balance sheet and our resilient business model will allow us to continue to minimize these impacts and continue to create value for stakeholders. We are monitoring events as they unfold during this period and preparing for several different scenarios. “- © 2020 NewsCentral Media
