Vodacom’s Resilient Performance: Service Revenue Climbs 10% Amid Market Challenges
Vodacom Group Limited has released its trading update for the quarter ending 30 June 2024, showing a 1.5% increase in group revenue to R36.2 billion, although foreign exchange rate headwinds affected results. On a normalized basis, group service revenue grew by 10.0%, surpassing the company’s medium-term target.
Service revenue in South Africa rose by 1.8%, driven by improved prepaid performance, while Egypt demonstrated robust growth with a 43.7% increase in service revenue in local currency and an impressive 87.0% rise in financial services revenue. The company’s international service revenue saw a 2.3% increase (5.7% on a normalized basis), supported by strong performance in Tanzania and other markets.
The group’s financial services revenue grew by 8.7% (16.8% on a normalized basis) to R3.3 billion. This was highlighted by a substantial US$400.2 billion in transactions through its mobile money platforms, including Safaricom. Vodacom’s super-apps—VodaPay, Vodafone Cash, and M-Pesa—are key to its strategy, integrating financial services with digital solutions.
In terms of geographic performance, Egypt stands out with service revenue growth of 43.7% in local currency, bolstered by a 47.9% increase in financial services customers and a 34.7% improvement in data traffic. South Africa’s performance was supported by a 31.3% rise in data traffic and a 6.3% increase in beyond-mobile services. The International business, including DRC, Mozambique, and Tanzania, experienced a 5.7% increase in normalized service revenue, with significant investments in 4G sites and new spectrum.
Vodacom invested R1.9 billion in the quarter and anticipates a total capital expenditure of around R11.5 billion for the year to enhance customer experience. The company is also moving forward with its proposed acquisition of a joint control stake in South African fiber operator Maziv, which is currently under review by the Competition Tribunal. This acquisition is expected to accelerate fiber deployment and support economic development in South Africa.
During the first quarter, we officially celebrated Vodacom’s 30th birthday, having signed up our first customer on 1 June 1994 when we switched on our network in South Africa. Three decades later, the Vodacom Group serves more than 200 million customers across DRC, Ethiopia, Egypt, Kenya, Lesotho, Mozambique, South Africa and Tanzania – a footprint that covers more than half a billion people and is almost 12 times greater than when we launched.
Shameel Joosub, CEO, Vodacom Group
As a purpose-driven company, I am particularly proud of the extraordinary transformational impact we have on our customers and the economies where we operate. This has provided a strong foundation upon which we are able to ensure sustainable growth of our businesses, while at the same time making a significant contribution in bridging the digital divide and expanding financial inclusion in Africa.
While the economic environment in recent years has been challenging, our strategy to diversify our revenue growth by product and geography is bearing fruit. This is evidenced by the 10.0%* growth in normalised Group service revenue to R29.0 billion in the first quarter – exceeding our medium-term target – as well as the 16.8%* increase in normalised Group financial services revenue to R3.3 billion.
Service revenue from our beyond mobile services (previously categorised as new services and includes digital and financial services, fixed and IoT) contributed R6.0 billion in the quarter, which equates to 20.8% of the group total, and is well on track to reach our target contribution of 25-30% over the medium-term.
Despite a challenging macroeconomic environment and foreign exchange rate risks, Vodacom is focused on connecting people for a better future. The group is committed to expanding access to smartphones, financial services, and digital connectivity, while addressing inequality and unlocking growth in critical sectors such as agriculture and energy.
