This morning Vodacom released its quarterly results for the period ending 31st December 2019 and there’s both good and bad news.
First the good news, revenue in South Africa is up with the firm reporting group revenue of R23 billion, a 6.1 percent increase year-on-year.
While not a massive increase, it should be noted that 2018 was a rough year for South Africans financially and Vodacom has recovered rather nicely in the 12 months since.
However, international revenue appears to have plateaued somewhat. Back in 2018 international revenue clocked in at R5.3 billion growing by 12.6 percent compared to 2017. By Q4 2019 that figure had grown slightly by nine percent to R5.7 billion.
That having been said, Vodacom’s group chief executive officer, Shameel Joosub, is pleased with the demand for data and M-Pesa services internationally.
“I am particularly pleased with the consistency in the performance of our International portfolio, which produced solid results on the back of strong demand for data and M-Pesa services, resulting in a 9 percent growth in service revenue. Our operations outside South Africa now contribute over 40 percent to Group service revenue,” the CEO said.
What will be interesting to see is whether Vodacom can increase that revenue contribution from its international interests. With the Competition Commission stating Vodacom needs to cut its data prices in South Africa, we will be interested to see if more attention is placed on the international side of the business.
Although Vodacom also faces regulatory red tape in other parts of the world as well, particularly Tanzania where 1.7 million customers were disconnected recently. The customers were disconnected following a failure to biometrically register SIM cards by 20th January.
As for 5G
The future of mobile broadband is 5G as we’ve heard for years now. Locally the push has been stymied by a lack of spectrum and regulatory ho-humming.
However, Vodacom revealed in its financial statement that it hopes to launch 5G locally in 2020.
“Having been the first network to commercially launch 5G in Africa through Vodacom Lesotho, we expect to be able to launch 5G services in South Africa this year. This is possible thanks to a recent roaming agreement with Liquid Telecom, as 5G spectrum is
largely unassigned in South Africa,” said Vodacom.
While the network will be rolled out by Liquid Telecom, Vodacom says it will manage the network on its behalf.
The network operator says that it is currently trialing 5G services ahead of the launch.
It will be terribly interesting to see how 5G services improve Vodacom’s revenue.
Local network rain offers a 5G solution in limited areas for as low as R1 000 a month for uncapped internet. Vodacom has the advantage of being a well established network but of course its not the one building the network.
With increased scrutiny locally and roadblocks internationally, it will be interesting to compare these figures again in 2021 once a 5G solution has launched.