Vodacom delivers strong growth, extends COVID-19 support initiatives
Vodacom has reported a 3.7 per cent hike in headline earnings for the financial year ended March this year March this year and an 8.3 per cent jump in revenue. The company has seen strong growth from their prepaid and enterprise segments and financial services. They've also seen 7 per cent growth in service revenue in South Africa. Vodacom CEO, Shameel Joosub joins CNBC Africa for more.
Tue, 18 May 2021 10:58:04 GMT
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AI Generated Summary
- Vodacom reports a 3.7% increase in headline earnings and an 8.3% surge in revenue for the financial year ended in March.
- The company witnesses strong growth in prepaid, enterprise, and financial services segments, along with a 7% uplift in service revenue in South Africa.
- Vodacom's proactive COVID-19 support initiatives include significant data price reductions, fee cuts on money transfers, and partnerships for vaccine distribution.
South African telecommunications giant Vodacom has reported a significant 3.7% increase in headline earnings for the financial year ended in March, accompanied by an 8.3% surge in revenue. The company's success is attributed to robust growth in their prepaid and enterprise segments, as well as their financial services division. Additionally, Vodacom has witnessed a 7% growth in service revenue within South Africa. To delve deeper into these impressive results and the company's impactful COVID-19 support initiatives, Vodacom CEO, Shameel Joosub, sat down with CNBC Africa to discuss their performance. Vodacom has been proactive in providing support to communities in need during the challenging times of the pandemic. The company took the initiative to reduce data prices significantly, amounting to a cost of about 3 billion REN last year. This year, Vodacom continued its support by implementing further cuts on data prices, expecting an additional impact of 1.5 to 2 billion REN. Moreover, the company facilitated fee reductions on money transfers, costing approximately 2 billion REN across their footprint. Vodacom also extended assistance by providing free phones to health workers and distributing 2,000 devices. Through partnerships with entities like Discovery, Vodacom contributed 87 million REN towards vaccine distribution in multiple markets. Notably, the company made the Mvexination platform accessible to the African Union to facilitate efficient vaccine distribution. Joosub emphasized the importance of corporate responsibility during these challenging times and highlighted Vodacom's commitment to supporting communities during the COVID-19 crisis. Turning to Vodacom's operational performance, Joosub acknowledged certain pressure points but emphasized the overall solid performance. The company invested 13.3 billion REN in capital expenditure during the year, with a significant portion allocated to South Africa. Joosub attributed Vodacom's success to its strategic approach to the pandemic, which included increased investments in networks to accommodate rising volumes. Despite facing challenges such as free person-to-person money transfers and data price cuts, Vodacom maintained its strength and capitalized on opportunities to grow its businesses, particularly the financial services sector in South Africa. The company's innovative initiatives, like Airtime Advance, played a pivotal role in their success. While Vodacom's domestic operations showcased remarkable growth, revenue service growth in international markets was relatively subdued, increasing by only 16%. Joosub explained that the international segment was significantly impacted by COVID-19 restrictions, including zero-rated person-to-person money transfers. However, Vodacom managed to recover in the latter part of the year, with a notable increase in transactions. Looking ahead, Vodacom remains optimistic about its prospects, especially with the commencement of the second phase of the COVID-19 vaccine rollout in South Africa. The discussion then shifted to Vodacom's efforts to make data more affordable and the challenges regarding the release of high-demand spectrum. Despite being embroiled in legal disputes over spectrum licensing, Joosub stressed that delayed spectrum allocation was hindering South Africa's development. He argued that licensing the spectrum in advance, as done in other countries, would enable operators to plan and build networks efficiently, ultimately benefiting the country's progress. Joosub called for a collective focus on the nation's interest and urged stakeholders to prioritize the broader societal good over individual concerns. Through its unwavering commitment to innovation, community support, and strategic investments, Vodacom continues to navigate challenges and drive growth in the telecommunications landscape. The company's success serves as a testament to its resilience and adaptability in the face of adversity.