Vodacom CEO prioritises spectrum for South African mobile data

Vodacom CEO Shameel Joosub said additional spectrum is essential to matching demand for mobile data services in South Africa, which he noted is falling behind in terms of fixed broadband rollout and access.

Joosub said Vodacom spent ZAR8.7 billion (€494 million/$559 million) on network upgrades in South Africa in the year to end-March as the operator more than doubled the number of LTE sites to over 6,000. The investment took Vodacom's 4G coverage to 58 per cent of South Africa by end-March, up from 35 per cent at the same point in 2015.

"Looking ahead, we will continue to explore spectrum opportunities," Joosub stated in Vodacom's annual earnings report. "Due to the country's dependency on mobile data, it is key to secure access to spectrum to unlock this growth potential and fulfil the growing data demands of the population," he added.

Joosub issued the statement as the company -- which is 65 per cent-owned by Vodafone -- reported increased earnings across the board in the year to end-March. On a reported basis revenue increased 7.5 per cent to ZAR80 billion, EBITDA grew 12.8 per cent to ZAR30.3 billion, and net profit rose by 3.2 per cent to ZAR12.9 billion.

Service revenues from Vodacom's international markets -- which include Lesotho, Mozambique, Democratic Republic of Congo (DRC) and Tanzania -- increased by 16.6 per cent in the year to end-March and accounted for 22.9 per cent of group revenues. Joosub explained that the growth came despite "an environment of heightened security regulations where unregistered customers of all operators were suspended."

Earnings per share of ZAR8.83 were up 2.7 per cent year-on-year, but fell short of the ZAR9.13 average predicted by analysts polled by Bloomberg, the news agency reported.

Looking ahead, the operator stated that it will seek to increase the contribution of its international businesses, expand its enterprise offerings, grow its fibre to the home and business networks, and accelerate its data growth. Other priorities include expanding usage of the M-Pesa mobile payment service, insurance, and the Internet of Things.

The announcement regarding M-Pesa comes a week after Vodacom announced it will drop the service in South Africa at the end of June because it does not expect to achieve its goals for user numbers in a market with a highly developed banking sector. That implies the goals regarding M-Pesa relate to Vodacom's operations in Tanzania, Lesotho, Mozambique and DRC.

Vodacom last week overtook domestic rival MTN Group as Africa's largest operator in terms of market value, Bloomberg reported in a previous article.

For more:
- see Vodacom's earnings announcement (PDF)
- view this Bloomberg article on the operator's results
- read this related Bloomberg report on market value

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