In a significant milestone for telecommunications giant Vodacom Group, which includes Safaricom among its key subsidiaries, the company has achieved a historic milestone by surpassing 200 million customers. This remarkable feat, as announced by CEO Shameel Joosub, marks a doubling of its customer base since 2018 when it reached the notable 100 million mark.
In this article, we delve into the factors driving Vodacom’s expansive growth and the implications of this achievement in the dynamic landscape of global telecommunications.
“As a purpose-led company, the transformational impact we have on our customers and the economies in countries where we operate provides a strong foundation upon which we are able to ensure sustainable growth of our businesses.,” said Joosub.
He added that boosted by acquisition of Vodafone Egypt, where revenue growth continues to accelerate, Vodacom Group revenue increased 26.8% during the quarter to R38.9 billion in a trading update for the quarter ended 31 December 2023.
On a pro-forma basis, which includes Egypt as if it was owned from 1 April 2022, revenue growth was 9.6%.
In Egypt, local currency revenue growth of 31.5% was underpinned by a strong performance from our mobile data, fixed and financial services, including a 40.7% improvement in data traffic.
“In South Africa, we delivered satisfactory revenue growth of 4.0% considering the strong comparative as a result of heightened loadshedding in the prior year quarter,” said Joosub.
“Across our International business segment it was pleasing to see that our network investment contributed to a 25.4% increase in 4G sites, which ultimately supported an acceleration of local currency revenue growth. As we combine network investment with our focus on digital inclusion and pioneering handset financing and rural coverage models, we expect these will unlock further meaningful growth opportunities across our eight markets.
“Revenue from new services – financial and digital services, fixed and IoT – is well on track to reach our target contribution of 25-30% over the medium-term.”
In the quarter, the contribution of new service revenue exceeded 20% for the first time, equating to R6.2 billion. Financial services remains the largest component of new services having grown 31.0% to R3.4 billion in the quarter, largely on the back of scaling new products and strong customer growth of 12.0%.
“We remain Africa’s largest mobile money platform by transaction value processed, with a value of close to S$100 billion in the quarter. Our super-app roll-out across the footprint remains a major focus for the Group. In South Africa, VodaPay reached 4.8 million registered users, with our summer campaign driving strong user engagement on the platform,” said Joosub.
Committed to Maziv transaction
On 10 November 2021, Vodacom announced a major step forward in scaling our fibre offering in South Africa.
Through the announced acquisition of an initial 30% stake in Maziv, a joint venture that will house fibre assets of Vodacom South Africa and Community Investment Ventures Holdings (CIVH), Vodacom intend to gain exposure to highly attractive and fast-growing businesses and South Africa’s largest open access fibre players including Vumatel and Dark Fibre Africa.
“With our capital injection and strategic support, we believe the transaction will further accelerate the growth of fibre in South Africa to foster economic development and help bridge South Africa’s digital divide.”
In October 2022, ICASA approved the transaction subject to licence conditions such as open-access.
In August 2023, the Competition Commission announced its recommendation to the Competition Tribunal to prohibit the transaction.
“The next regulatory step is for the transaction to be presented to the Competition Tribunal where the full merits of the transaction will be reviewed for final approval,” said Joosub.
“Looking forward to the Competition Tribunal hearing in May 2024, Vodacom intends to showcase the strong public interest and pro-competitive advantages that the transaction would have on the fibre market, and the country as a whole.”
