- Vodacom Group reports revenue grew 36.9 percent in the last quarter.
- This growth was bolstered by the acquisition of Vodafone Egypt where revenue from financial services nearly doubled.
- Vodacom Group’s financial service platforms VodaPay and M-Pesa also saw strong gains throughout the quarter.
Financial results from local companies have been something of a bloodbath of late considering the impact loadshedding has had not only businesses but the customers of those businesses.
Earlier this year Spar noted that consumer spending had dipped as customers looked to save money and potentially invest in back up power solutions. However, the same woes haven’t impacted Vodacom which has reported that revenue for the entire group increased 36.9 percent during the quarter ended 30th June.
Of course, Vodacom as a network operator has something of a captive audience in that most folks will turn to the internet to alleviate the boredom associated with power cuts.
This growth was led by the acquisition of Vodafone Egypt where Vodacom saw revenue from financial services “more than doubled”. The network operator also saw more data traffic on its network with an increase of 43.2 percent noted thanks to successful summer and Ramadan campaigns.
Locally, Vodacom is also starting to see the benefits of protecting its network from loadshedding.
“In South Africa, our R4 billion investment over four years to mitigate the impacts of loadshedding continues to pay dividends. We now invest more than R11 billion a year into our South Africa infrastructure alone, which has resulted in industry leading network availability during elevated levels of power outages and ultimately contributed to the 3.9% increase in service revenue in our largest market,” Vodacom Group chief executive officer Shameel Joosub said in a statement addressing investors.
“Vodacom has responded to South Africa’s power crisis with increased investment in power resilience and meaningful engagement with stakeholders. We welcome the government’s block exemptions for energy users and suppliers, which enables more efficient procurement and use of backup energy solutions. We were also encouraged by Eskom’s recent publication of a ‘Virtual Wheeling Platform’ paper that builds on our pioneering project with the energy utility to drive private sector investment into new energy generation. We are confident that our virtual wheeling agreement with Eskom will be signed off in the near term and that this will have a positive impact on the country’s power grid and renewable energy mix,” Joosub added.
The big winner for Vodacom Group, however, seems to be its financial services solutions. These include VodaPay and M-Pesa which helped revenue increase 46.2 percent. The group also claims that $1 billion is being transacted through its mobile money platforms daily.
Locally, VodaPay has seen 6.7 million downloads, bolstered by features such as free deposits, the ability to send money and cash-out from the app.
The firm is also looking to launch its M-Pesa product in Ethiopia following Safaricom being awarded a mobile financial services licence in the region pointing to more growth in this sector and potentially even more revenue gains once the service comes online.
Vodacom’s move to acquire a strategic stake in Community Investment Ventures Holdings’ (CIVH) fibre assets is still being deliberated by the Competition Commission here in South Africa.
“Vodacom has an option to increase its stake to 40% and with our capital injection and strategic support we will further accelerate the growth of fibre in South Africa to foster economic development and help bridge South Africa’s digital divide. The joint venture acquisition remains subject to Competition Commission approval, having received approval from ICASA, subject to licence conditions such as open-access, in October 2022,” said Vodacom.
The telco appears to be doing rather well despite the market conditions and with plans to expand on that success, Vodacom is in a winning position.