10 / 98
Vodacom Group Limited
Integrated report for the year ended 31 March 2016
06
Growth in Enterprise
It has been a good year for Enterprise, where our investment in
infrastructure and skills building is now paying off. Our mobile
enterprise business grew 9.9%
1
this year. Our fixed-line and business
managed services in South Africa increased 26.5% year-on-year to
R1.7 billion; it now comprises 14.9% of total Enterprise service
revenue. Growth was supported by the increased demand for fixed
services, particularly our IP-VPN offers and our cloud and hosting
services, as customers sign up for cloud solutions such as
SAP HANA software and Microsoft Office 365. We are continually
expanding our service proposition in the cloud and hosting space.
Our collaboration with IBM, our extensive fixed and mobile
infrastructure, our pan-African and global footprint, and our
investment in data centre infrastructure, provides the ideal
platform and environment to deliver cloud services to large and
multinational enterprises. Vodacom Business Africa continues
to expand, growing 16.6% year-on-year.
Growth in new services
To maintain long-term growth, we are increasing our investment in
new services, including insurance, Internet of Things (IoT, previously
machine-to-machine (M2M)), fibre and content, with dedicated
‘acceleration units’ established to drive further uptake in these
areas. During the year, our IoT connections grew 28.2% to
2.3 million, generating revenue of R556 million up 20.7%
2
, while
insurance revenue grew 18.8% to R524 million. Our digital offerings
in mobile health and agriculture are also gaining momentum, where
we see exciting upside potential over the longer term. Our progress
in rolling out fibre has been slower than anticipated. Despite the
recent setback with the termination of the Neotel deal, I remain
confident that we will see significant growth in this area as we
implement our strategy around wholesale, self-build and co-build.
Driving operational efficiencies
Given the impact of inflation, currency volatility, an increase in
number of sites, and rising electricity and other input costs, we
have been placing a strong focus on driving operational efficiencies
across the Group. We are pleased with the positive progress we
made this year with our ‘Fit for growth’ programme, a multi-year
Vodafone Group-wide initiative that allows us to leverage global
best practice on optimising costs.
In our network, we have achieved significant efficiencies in managing
our capital and operating costs relating to energy, leases and
rentals, transmission rental and maintenance. Our Technology
Efficiency programme has delivered on its cost savings objectives,
keeping technology operating expenditure at 8.7% of service
revenue in South Africa, as well as achieving savings in capital
expenditure by driving equipment standardisation, network sharing
and procurement benefits. In South Africa, we share approximately
74% of shareable sites with other network operators and third
parties; we are engaging in site sharing to varying degrees in our
International markets.
CEO’s statement
continued
1. Growth excluding the impact of Nashua in the prior year and Autopage in
March 2016.
2. Growth normalised for consolidation of X-Link in the prior year.
Estimated population coverage (%)
Active smart devices (thousand)
Group data revenue (R million)
Growing M-Pesa customers (thousand)
South Africa
South Africa
58.2%
LTE/4G
98.9%
3G
2016
+22.8%
28.5%
+15.4%
34.8%
LTE/4G
95.5%
3G
2015
2015
11 588
14 227
2016
7 991
2015
9 224
2016
21 306
2016
16 584
2015