The robust performance by its international operations’ has helped the company to offset South African revenue decline
Vodacom has added 608,000 customers to its South African network in the second quarter, with an average of 67,000 people opting for its services every day. Still, the company has not managed to churn enough profits from its customers in South Africa, media reports said.
The company’s South Africa service revenue declined 1.2 percent year-on-year, however. Its international operations’ robust performance has offset South Africa’s revenue decline.
Vodacom added 560, 000 customers outside South Africa, representing 5.3 percent growth. The company’s growth from its international service revenue was strongly bolstered by M-pesa and data demand.
Vodacom Group CEO Shameel Joosub in a statement to shareholders, said, “Growth from our international portfolio offset the anticipated slower performance in South Africa, which was impacted by new data usage regulations, significant data price cuts and a subdued economy weighing on consumer spend.”
Factors including reduction in out-of-bundle data rates and regulations on data usage and the shift between roaming partners from Cell C to Telkom are the reasons for the company’s drop in revenue, it said.
In March, Independent Communications Authority of South Africa (Icasa) enforced new regulations for all South African cellular network providers.
According to the new regulations, a cell phone provider cannot automatically switch users to out-of-bundle use without seeking user permission. The providers will have to allow users to roll out unused data before the date of expiry and transfer the data to other users of the same providers.
South Africa has one of the most expensive data prices compared to the rest of the continent.