Vodacom Quarterly Revenue Misses Expectations -- Update
July 21 2016 - 2:37AM
Dow Jones News
By Alexandra Wexler
JOHANNESBURG--Vodacom Group Ltd. (VOD.JO), South Africa's
largest mobile operator by subscribers, missed expectations for
revenue in the three months ended June 30, as the company's
international operations were affected by new customer registration
processes, especially in Mozambique and Congo, as well as increased
competition.
Vodacom, majority-owned by the U.K.'s Vodafone Group PLC,
reported revenue of 19.9 billion South African rand ($1.39
billion), missing expectations for revenue of ZAR23.56 billion.
Still, revenue was up 5.8% from the same period a year earlier.
The company's total active customers fell 2.6% to 61.8 million,
the company said.
Total active international customers fell 12% to 26.7 million in
the first quarter, while in South Africa, the company's total
active customers rose 5.4% to 35.1 million.
Last year, Nigerian authorities fined MTN Group Ltd., Africa's
largest telecommunications company, billions of dollars after it
failed to disconnect improperly registered SIM cards by a
government-imposed deadline, under regulations meant to combat
terrorism.
The Congolese and Mozambican governments ordered similar
disconnections of unregistered users last year under new subscriber
registration legislation. Vodacom's active users in Congo dropped
29% to 8.5 million, while in Mozambique, active customers fell 4.3%
to 4.8 million.
Still, active data users in Congo rose 24% to 2.9 million and in
Mozambique, were up 3.2% to 2.1 million customers. Total active
smart devices on the network rose 18% to 14.1 million in the three
months to June 30, and in the international segment, 41% of active
customers used data during the first quarter, up from 34% during
the same period a year earlier.
That is due largely to Vodacom's sales of more affordable
smartphones and other data devices, as well as better network
quality and coverage. Total revenue from data increased 19% to
ZAR5.79 billion in the quarter, accounting for 34% of service
revenue.
Vodacom said it would continue to stoke growth of data usage
with a range of reasonably priced Vodacom-branded devices.
Write to Alexandra Wexler at alexandra.wexler@wsj.com
(END) Dow Jones Newswires
July 21, 2016 03:22 ET (07:22 GMT)
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