Vodacom smartphones rose 22% to 8.9m in 2014

By Gugu Lourie

Vodacom’s smartphones in its network rose by 22% to 8.9m in the quarter to end-December 2014, Vodafone said in its financials on Wednesday.

Vodafone added that Vodacom’s data revenue rose 19% attributing the growth to an 86% increase in data volume, with average monthly usage per customer now 445MB.

However, Vodafone revealed that Vodacom’s service revenue fell 3.9% with quarterly revenue trends deteriorating further following increased competitive and macroeconomic pressures in South Africa. South African service revenue dropped 5.8%, mainly due to a weakening in prepaid customer voice activity as a result of competitive pressures.

Vodacom Group operates in South Africa, Mozambique, Lesotho, Tanzania and the Democratic Republic of Congo.

Vodacom, SA’s largest mobile phone operator by subscribers ahead of MTN, is 65% owned by the British mobile giant Vodafone, with 17% held by the South African government and the Public Investment Corporation. Vodafone has 438m mobile customers and 11m fixed-broadband customers and employ about 93 000 people.

Vodacom in South Africa is in a process of buying Neotel, SA’s second-biggest fixed-line telephone group, for R7bn.

The acquisition of Neotel is currently under review by the telecoms and competition authorities and the delays were frustrating Vodacom’s parent company, Vodafone.

Vodafone Group CEO Vittorio Colao indirectly pleaded with the South African government to finalise the approval of the deal. “It will be nice if M&A process took less time and were shorter and easier,” he said, adding that it is not unheard of mergers and acquisitions (M&As) in telecoms going on for a year and beyond it is not perfect.

The approval for the Neotel-Vodacom proposed tie-up has been going on for close to a year.

Colao said the Neotel deal was trying the limit of the Vodafone’s patience, however emphasized  that  the delays in M&As were not limited to the telecommunications sector, nor to the South African market.

He urged the South African government to make sure that M&As don’t run long, and that consideration  should also be given to a company that was being acquired as delays would hamper its decision-making going forward.

While Vodacom CEO Shameel Joosub also reiterated that the delays to approve the Neotel transaction were frustrating the mobile operators’ plans to deploy fibre-to-the-home and business, adding that a day that goes by without the deal being approved is a day lost for the group.

“It’s a day lost as we could have accelerated fibre-to-the-home and business. We’ve stepped up to say we will be the second network operator and really build fibre-to-the-home and business. We have less than 5% today, developing countries have between 75% and 100%. We have a long way to go,” said Joosub.

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