Mobile operator Vodacom released its annual results this morning, revealing that the operator’s net profits for the year are still hugely substantial – it made R12.5billion net profit in the 12 months before April 2015 – but were down by 8.5% compared to last year.
Much of the damage, the firm says, was as a result of the drop in revenue from mobile termination rates (MTRs) in South Africa. It reported a 2% decline in revenues in its largest market (Vodacom also operates in Tanzania, DRC, Mozambique and Lesotho), which would have been a 2% growth if MTRs hadn’t been slashed by regulator ICASA last year.
Still, it’s first time the operator has recorded a fall in profits since 2010 (the chart below has an adjusted scale for profit on the left, revenue on the right).
What’s interesting is that despite the often voiced concern that voice revenues are falling and mobile operators must do something to repair the damage, this is actually the first time Vodacom has reported an actual drop in voice revenues ever rather than a drop in growth. In fact, it dropped to 2012 levels – a just under 5% drop.
What’s really interesting in that chart is the bottom line. Mobile messaging – SMS, essentially – has ploughed on for the last six year years almost unchangingly. Despite options like WhatsApp, Facebook messaging and so on, SMS doesn’t appear to be declining at a huge rate – although it is down to R3bn a year from a peak of R3.5bn in 2013.
Perhaps the most interesting part of the results – for us, at least – is this last chart. Vodacom’s data revenues are going through the roof – but so are device sales. And it’s not all premium handsets either. Apparently the firm sold over three million budget smartphones and tablets last year, including 640 000 Kickas, the first sub-R1 000 smartphone in the country. Revenue from device sales has grown almost on a par with revenue from data, and is almost three times what it was in 2009.
Of course, actual profit from devices is likely to be lower – although given that subsidised phones are a thing of the past, perhaps not so much.