Vodacom reports strong performance, boosted by new Vodapay app

Telco aims to further expand its digital and fintech services.
Image: Moneyweb

South Africa’s largest network provider Vodacom, reports that the positive reception of its VodaPay app launched in October last year has strongly supported the group’s performance and its broader financial services business. The company saw its revenue grow 12.5% to an unexpected R2 billion for the first time in the three months to December 31.

The group noted in its trading statement on Tuesday that financial services remains a priority for the company and that the business continues to gain steady momentum.

“The group remains committed to focusing on the economic recovery in markets where we operate through the execution of a purpose-led six-point plan. This plan includes expanding network coverage and resilience, accelerating support to governments, enhancing digital accessibility and digital adoption and supporting our customers as they adapt to new ways of working and promoting financial inclusion,” Shameel Joosub, Vodacom Group CEO said.

“In South Africa, the launch of our VodaPay super-app in October last year has exceeded our expectations by attracting 1.4 million downloads and 1.0 million registered users in its first three months. We see VodaPay as a precursor to M-Pesa’s evolution and further strengthening our fintech position across our footprint.

“Our M-Pesa platform, including Safaricom, continues to scale at an impressive rate with transaction values up 16.1% to exceed R430 billion per month.”

The group’s overall revenue grew 6.4% to R26.7 billion in the same period, with its service revenue climbing 5.3% to R20.7 billion on the back of continual demand for connectivity, and growth in new services including financial and digital services such as the VodaPay app which allows users to make purchases, pay bills, and send money.

In South Africa, Vodacom’s revenue grew 5.8% to R20.9 billion while its service revenue increased 4.5% to R14.9 billion, also supported by a sustained demand for connectivity, growth in financial services and increased engagement from launching the app.

Its South African customer base expanded 3.3% year-on-year (yoy) to 45.8 million, while internationally it grew to 42.1 million, marking a 6.9% yoy increase.

“In SA, we invested a further R2.3 billion in the network during the quarter and delivered great value to customers through a highly successful summer campaign that attracted over 400 million engagements, unlocking prizes and rewards for our expanded customer base,” Joosub added.

The group also noted that its data traffic growth rate accelerated to 25.9%, supported by work-from-home solutions. Smart devices on its network were up by 11.3% to 25.9 million, while the number of 4G devices increased 14.7% to 17.3 million. The average usage per smart device increased 24.4% to 2.5GB per month.

“A key focus for our international portfolio is digital inclusion, which will be supported by our growing 21.5 million data customer base and driving higher smartphone adoption. International customers on smartphones stands at 12 million,” Joosub said.

Read: Vodacom shareholders green light R41bn Vodafone Egypt acquisition

“Looking ahead, we are encouraged by the post Covid-19 recovery taking place in many of the markets in which we operate and look forward to making meaningful contributions to foster economic development.”

Read/listen: Are telcos becoming the new bankers? (read transcript)

Palesa Mofokeng is a Moneyweb intern.

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