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Vodacom capex tops R10bn

As it ramped up investment to deal with soaring demand.
Image: Waldo Swiegers/Bloomberg

Vodacom spent more than R10 billion on its network in South Africa in the financial year to 31 March 2021, outpacing rival MTN’s local spending, as it ramped up investment to deal with soaring demand.

A sudden shift in consumer behaviour patterns, brought on by Covid-19 and the associated lockdowns from March 2020, forced Vodacom to invest “heavily in the resilience of our networks to cope with significant increases in mobile data traffic volumes to keep families connected, enable businesses to operate, facilitate online learning and assist governments in providing critical services”, said group CEO Shameel Joosub.

“We invested R13.3 billion in network infrastructure during the year, including R10.1 billion in South Africa, and as a group we have invested R62.4 billion into our networks over the past five years.”

Vodacom on Tuesday reported group revenue up 8.3% (7.4% normalised) to R98.3 billion, supported by service revenue growth of 5.8% (4.7% normalised). South Africa service revenue grew 7%, with consistent growth through the financial year, Vodacom said.

Earnings per share were up 4.2% and headline earnings per share rose 3.7%, while Vodacom declared a final dividend of R4.10/share.

The group added 8.2 million customers, to serve a combined 123.7 million, including Safaricom. Total financial services customers, including Safaricom, climbed 12.9%, or 6.6 million, to 57.7 million.

Guidance upgraded

It upgraded its medium-term operating profit growth target from mid-single digits to mid-to-high-single digits, on improved growth prospects for its international business and Safaricom.

“While being cognisant that disposable income will remain under pressure, we are increasingly optimistic about improved growth prospects for our international operations,” Joosub said.

The South African service revenue performance was underpinned by increased data usage, a summer campaign and demand for financial services – “collectively helping to offset numerous initiatives aimed at delivering greater value to customers, including tariff reductions of up to 40% at the beginning of the financial year and the successful launch of Vodabucks, our behavioural loyalty programme”.

© 2021 NewsCentral Media

Duncan McLeod is editor of TechCentral, on which this article was first published here.

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