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Vodacom Group Limited
Integrated report for the year ended 31 March 2016
04
CEO’s
statement
Our excellent performance this year reflects the
successful execution of our well-planned strategy.
The decision to invest significantly in our network
and create a clear differentiation point has borne
fruit, supported by our strong focus on enhancing
the customer experience and providing customers
more value and personalised pricing plans.
Delivering on our strategy
While there have been some disappointments – most notably
the termination of the Neotel deal – for the most part it has been
a very pleasing year. Our sustained growth has been particularly
encouraging given the tough macroeconomic environment.
Group revenue increased by 7.5% to R80.1 billion. Significantly, data
revenue has continued its upward momentum, increasing 28.5%
to R21.3 billion. The data revenue growth reflects the increased
demand for data services as customers upgrade to 3G and LTE/4G
devices, as well as the 8.6% growth in active data customers. It is
pleasing to report that service revenue increased 7.4%, supported
by continued customer growth, improving voice revenue trends
and the expansion of our services in the enterprise market. The
enterprise business has performed well, with demand growing for
our cloud, hosting and virtual private network (VPN) services.
We have been encouraged to see that our strong focus on
maximising the customer experience is delivering results across all
our markets. In South Africa, we added 2.1 million new customers.
Contract customer churn in South Africa has dropped to 8.5%.
Our International customer numbers have been negatively affected
by customer registration compliance.
We have performed very well in our markets in terms of customer
satisfaction, as measured by net promoter score (NPS). We lead in all
markets, except the DRC and Tanzania where we have improvement
plans in place. In South Africa, our largest market, we have achieved
a remarkable lead in overall NPS of 15 points over our nearest
competitor, up from a six-point lead at the same time last year.
In addition, we won the award for the Best NPS Performance
across the Vodafone Group.
Differentiating on network performance
The basis of our competitive advantage lies in the superiority
of our network, achieved through our investment in network
infrastructure. Our capital investment this year of R12.9 billion
has enabled us to further expand our 2G, 3G and LTE/4G network
coverage, increase data speed, and reduce our dropped-call rate
across the region, ensuring that we continue to deliver on our
‘Best network’ promise.
In South Africa, our 2G network now covers 99.9% of the country’s
population, wider than any other service provider. Our 3G network
covers around 98.9% and LTE/4G 58.2% of the population, well
ahead of our competitors. Our investment in radio transmission
and capacity has allowed us to connect 88.5% of our sites to
high-speed transmission. Our dropped call rate of 0.41% is not only
the best in South Africa, but is also below the Vodafone target for
its operations.
Through our infrastructure investment, we have retained our top
position in South Africa in network coverage, call quality rates and
speed, securing a 29 point lead at year end for overall network NPS.
In our International markets, we have increased the number of
3G sites by 28.5% and 2G sites by 16.7%, and have begun testing
LTE/4G in several of our markets, with Lesotho already having an
operational LTE/4G network. At year end, we were rated first for
network quality in all of our markets in network NPS, except
Tanzania where we were rated second.
By strengthening our network lead and enhancing access to
affordable voice and data services, we are making a significant
developmental contribution across all our operations. This is
enhanced through various services, including most notably M-Pesa
(our mobile phone-based money transfer and inclusive financing
Shameel Aziz Joosub