Vodacom's M-Pesa ambitions heat up post Safaricom transaction

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"Without new spectrum we are forced to build more base stations to meet data growth demand".

"These are promises that we have delivered on, with effective data prices decreased by 24.2% during the six-month period". "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.

"Additional spectrum will allow us to invest more efficiently and accelerate our rural coverage programme".

Revenue growth was up 7.7% to R33.9bn. Vodacom acquired 34.9% of Kenya's Safaricom from parent Vodacom during the period.

Underpinning the results were Safaricom's contribution over the last two months of a profit of R349-million and a strong 10.8% expansion of Safaricom's customer base to 29.5-million customers, he said.

"The sale of smartphones grew by 18.3%, comprising 59.5% of total device sales", the report read.

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.

Contract customers increased by 107 000 to 5.2m.

Data revenue comprised 13.6 percent (2017: 13.4%) of global operations' service revenue.

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South Africa revenue growth accelerated to 7.7% boosted by stronger device sales, it said. Service revenue declined by 4.8% to R8.3bn. Exchange rate volatility continues to dent reported growth in worldwide operations.

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

The company battled unfavourable currency headwinds, which took some shine off its global operations, with revenue and service revenue declining 5.2% and 4.8%, respectively. M-Pesa revenue grew 14%.

Customer growth for this service remains strong with 56% of customers using the service in Mozambique, 35.3% in Lesotho and 22.2% in the DRC.

The company added 356,000 data customers in South Africa to 19.9 million, up 9.6% - or half of the mobile customer base.

"We will be driving further development of M-Pesa across all markets, expanding our enterprise opportunity across East Africa, and driving big data initiatives across the two organisations", Joosub said.

Vodacom said Tanzania remains the leader in global operations with 61.7% of customers using M-Pesa.

The group's capital expenditure of R1.5bn was directed towards strengthening network and service differentiation and to support wider voice coverage and data growth.