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Vodacom 1st Half Profit Helped by Safaricom Acquisition

14 November 2017

Vodacom has released its results for the six months ended 30 September 2017.

The group reported a 1.1% increase in headline earnings per share to R4.45 in the first half of the 2018 financial year, though cut its dividend slightly. South Africa accounted for 2.9-million of the total, while the balance came from its worldwide operations.

Vodacom declared an interim dividend of 390 cents per share, down from 395 cents per share a year ago.

Vodacom said it defines a customer as a user using any service during the last three months. "It achieved local currency service revenue growth of 12% for the six months period to Kenyan Shilling 109.7bn (R15.23bn)". This was boosted by equipment revenue growth of 18.4% which reflects the improved exchange rate against the U.S. dollar.

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M-Pesa revenue now contributes 27% to service revenue and mobile data 16% to Vodacom Group.

Data bundle sales grew by 55.5% to 347 million, and the group said it has introduced new initiatives to improve the customer experience on out-of-bundle-data spend, and is "driving data-usage education to give customers more control".

Joosub added that the group had delivered on its promises to reduce data prices and addressing out-of-bundle prices. Migration to the new "more data" contracts, which have a larger data allocation, accelerated to 25% of the base.

Prepaid customers increased by 2.8 million to 34.8 million, up 13.4%, which was driven by the success of the "Just 4 You" offers and customer segmentation, the group said.

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"Additional spectrum will allow us to invest more efficiently and accelerate our rural coverage programme". "As leading mobile network provider in South Africa, with the best 3G and 4G networks, it was crucial for us to partner a formidable player such as Nokia as we're gearing ourselves for the next generation of wireless networks, 5G", Vodacom Group Chief Technology Officer Andries Delport said in a statement. Data revenue grew 15% to R11.4bn and this contributed 42.6% of service revenue, exceeding voice revenue. M-Pesa revenue grew 14%.

During the first half of the year, on average, R24 billion was processed monthly through the M-Pesa system, the company said. "Tanzania remains the leader in global operations with 61.7% of customers using M-Pesa", Joosub concluded.

"We expect that the Safaricom transaction will further drive M-Pesa development and penetration outside of South Africa".

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Vodacom 1st Half Profit Helped by Safaricom Acquisition