Vodacom shares fall on drop in customers
Vodacom shares slumped on Thursday as the cellphone operator reported that its customer base fell more than 2% in the three months to June.
|||Johannesburg - Vodacom shares slumped yesterday as the country’s biggest cellphone operator reported that its customer base fell more than 2 percent in the three months to June after regulatory scrutiny strangled its growth in African markets.
The share price dropped 2.24 percent – the biggest in weeks – to close at R166.20 to value the company at R247.3 billion.
The group said during its trading statement that its customers declined 2.6 percent to 61.8 million despite the fact that subscriptions in South Africa had increased marginally.
It said customers in the Democratic Republic of Congo fell 28.8 percent from 12 million to 8.5 million, while Mozambique had recorded a 4.3 percent decline to 4.8 million.
Chief executive Shameel Joosub said despite the setbacks, the company grew its total revenue by 5.8 percent to R19.9bn in the quarter.
Joosub said the strong performance in revenue from last year was reflective of the successful execution of a well-planned strategy.
“Despite the tougher economic environment in most of the countries in which we operate, the group delivered robust service revenue growth of 7.3 percent,” Joosub said.
“One of the major highlights this quarter is the stellar number of customer additions in South Africa in both post paid and prepaid, where we added almost 1 million customers.”
In South Africa, Vodacom grew its active customers to 35 million, a 5.4 percent increase from the previous year and a 2.7 percent increase from the March quarter.
Joosub said the country had sustained robust service revenue growth of 5.6 percent to R12.43bn, despite increasing pressure on consumer spending.
He said the growth was supported by strong customer additions, high demand for data services and improved voice revenue growth trends.
Outside South Africa, total active customers fell by 11.5 percent to 26.7 million in the period, while service revenue grew by 13.5 percent contributing 26.7 percent of group service revenue.
The group said growth in international operations had been impaired by new customer registration processes and competition.
Ian Cruickshanks, an independent analyst, said Vodacom had made huge strides in the data sales revenue – up 19.4 percent. This was important because that was the area of growth in the future, he said.
BUSINESS REPORT