Vodacom 2013 Results: Data Story
South African mobile operator Vodacom released its FY2012/2013 results, showing slow growth in South Africa, but much a much better performance in other sub-Saharan markets. In line with industry trends, data was the major growth driver for the group; BMI expects Vodacom's continued emphasis on developing data networks and services will allow it to remain competitive.
In South Africa Vodacom's service revenue fell by 0.4% to ZAR48.88bn (US$5.18bn) as mobile termination rates have begun to take effect. The operator's subscriber base for the year ending in March 2013 grew by 4.9%, although since strong performance up until June 2012, its subscriber base has slowly declined for the last three quarters. Vodacom South Africa's data revenue grew by 16.3% to ZAR8.88bn, accounting for 18.4% of revenue for the year ending in March 2013, and in the final quarter of the year it grew at an even faster pace of 20.5%. Capex was ZAR6.97bn, equivalent of 11.9% of revenue, and mainly focused on improving network transmission speeds.
|South Africa And Sub-Saharan Africa 3G/4G Subscriber Forecast, 2010-2017, ('000)|
In its international markets, covering DRC, Mozambique, Tanzania and Lesotho, Vodacom's revenue went up by 11% to ZAR11.58bn. These markets are increasing in value, as their contribution to the group's total service revenue increased from 17.4% in 2012 to 19% in 2013. The main growth driver in international markets was a massive uptake of data services, with a 41% increase in data customers and a 107% growth in data revenues.
Overall, Vodacom Group's active subscriber base increased from 47.8mn in 2012 to 51.7mn in 2013, its year-on-year service revenue rose by 1.9% to ZAR 59.34bn, EBIDTA increased by 10.9% to ZAR25.25bn, and capex was ZAR9.46bn and accounted for 13% of revenue.
In South Africa's saturated mobile market, Vodacom plans to retain its market share with continuous improvements in its network quality and coverage. Compared to its main rival MTN, Vodacom is already in a good position: MTN had 281 LTE sites and 11,172 2G and 3G sites in December 2012, and Vodacom had 601 LTE sites and 15,515 2G and 3G sites in March 2013. Vodacom serves more customers than MTN, though, and it will continue to face strong competition from all other operators.
In DRC, Mozambique and Tanzania, where there is still room for growth, Vodacom will be looking for new customers as well as encouraging the uptake of data services, with an emphasis on value added services such as M-pesa. BMI believes Vodacom's international markets will continue to outperform as lower tariffs and more affordable smartphones and tablets encourage more subscribers to sign up to 3G services.