South African mobile operator Vodacom Group, has reported an 8.9% rise in annual earnings and has postponed issuing medium-term forecasts due to the uncertain economic outlook as the effects of the coronavirus pandemic continue to unfold.
“The past year has been characterised by strong customer growth – we now connect 116 million customers across the group, including Safaricom – and the benefits of prudent portfolio diversification,” Shameel Joosub, group CEO, Vodacom said in a statement.
In South Africa, growth in the second half of the year ended March 31 more than offset the decline in service revenue during the first, supported by an increase in data elasticity and usage following sharp data price reductions announced in the first quarter.
Vodacom also improved its fibre roll-out in the second half of the year, more than doubling the total number of homes and businesses connected to 61,427.
The increased data traffic, a 21.5% jump in financial service revenue and a 6.7% rise in enterprise service revenue led to service revenue in South Africa rising 2.3% in the year ended March 31.
“The increase in the drivers of data growth gives us confidence that we will continue to see elasticity to compensate for the pricing transformation initiatives agreed with the Competition Commission and implemented from 1 April 2020,” Joosub added.
Last December the competition watchdog ordered Vodacom and rival MTN to cut 30-day data prices after it found that prices charged by the operators were much higher than those in other African countries.
Vodacom is also banking on high data demand by customers working and learning from home due to coronavirus restrictions, to lift revenue.
Outside of South Africa, its international operations continued to show strong growth, with an additional 4 million customers and increased demand for data and financial services under mobile money platform M-Pesa, contributing to a 12.5% increase in service revenue.
This led to group revenue rising by 4.8% to R90.7bn ($4.97bn), with group service revenue up 5%.