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service), which has shown strong growth in our International
markets. To support this growth we have invested in transferring
our existing M-Pesa platforms to the new Vodafone Group Mobile
Financial Services Platform; we have already migrated our DRC
network to the new platform, and will be migrating Tanzania and
Mozambique soon.
Differentiating on value and affordability
Having the best network is important, but we need to support this
by ensuring we deliver a truly differentiated customer experience.
Through our renewed focus on customer care we are striving to
keep our promise of providing the best service. We are targeting
clear market leadership in all our operations, with the goal of
achieving a consistent five-point lead in NPS.
We have made significant progress this year in our pricing
transformation strategy, offering more personalised packages that
provide customers with greater value, improves ARPU and helps us
to secure spend. At year end, 85.1% of our contract customers were
on new integrated price plans with better value offerings. We are
seeing the benefits of our contract pricing transformation, with
record low contract churn of 8.5%, improved ARPUs, and underlying
contract revenue returning to growth; 71.3% of our contract
revenue is now in bundle. On the prepaid side, our strength in
customer value management is being used effectively to target
customers with personalised offers not publicly advertised. We are
seeing very good results from our ‘Just 4 You’ platform, which
profiles customers’ behaviour and presents them with personalised
offers, resulting in us selling over 1.1 billion voice and data bundles
this year. We have moved customers from legacy plans to new
prepaid price plans. Our pricing transformation has resulted in a
16.9% reduction in the blended price per minute for calls, and a
13.6% reduction in the average effective price per megabyte of data.
Differentiating on customer service
In May 2015, we launched an ambitious three-year programme
under the Vodafone global CARE initiative that focuses on four areas
aimed at maximising the customer experience:
•
Connectivity
– guaranteeing network satisfaction in terms of
speed, reliability and coverage, and taking a more proactive
approach in checking coverage and call quality.
•
Always in control
– ensuring that customers have full control
of their spend and do not have any surprises from bill shock.
•
Rewarding loyalty
– incentivising long-term customers for
being part of the Vodacom family, with personalised offers
and refreshing of our existing postpaid and prepaid loyalty
programmes.
•
Easy access
– maximising the efficiency and availability of
customer support, digitizing our customer experience,
increasing functionality and improving processes.
Complementing this initiative, we have begun the migration on our
Customer 3D (C3D) programme, a new customer management and
billing system that is needed as we transition from a predominately
mobile company to a unified communications provider. We are
planning to move over all contract customers to this system in the
first half of the new financial year.
Monetising data
We have made excellent progress in driving the uptake of data,
our key engine for growth. Our data strategy is predicated on
four pillars: having the best network; getting a device into every
customer’s hands; offering affordable value across all segments;
and providing more reason to consume data through the
provision of content.
In addition to increasing our addressable market by extending
3G and LTE/4G network coverage, we have promoted access to
more affordable data devices. This year, the number of active smart
devices on our network increased by 22.8% to 14.2 million,
with tablets increasing 56.3% to 1.7 million. The sale of Vodacom
branded devices accounted for 25.7% of total device sales. In
addition to promoting more affordable devices, we have launched
differently priced data bundles, contributing to the 85.9% increase
in total data bundle sales to approximately 343 million.
Providing digital content is another key driver for data growth. We
have ambitious plans to be a formidable player in bringing targeted
content to consumers – be it music streaming, gaming, TV and
video, news or sport – through various distribution channels. In
implementing our reseller strategy, we have secured valuable
partnerships with content providers, and are focusing on forging
more relationships going forward.
Our International operations
Our International operations delivered a solid performance this year,
maintaining double-digit revenue growth at 16.6% to R18.4 billion.
22.9% of our revenue comes from our International portfolio.
The operations continued to benefit from increased usage in
voice and data, and growing adoption of M-Pesa. Data revenue
increased 31.9% and there remains significant growth potential with
only 37.1% of customers currently actively using data. To support
this data growth and ensure wider voice coverage we have
increased our network coverage across the regions. Service revenue
increased by 16.2%, representing 9.6% growth when normalised in
constant currency.
M-Pesa is progressing well in our International operations with
a 15.4% increase in active customers to 9.2 million, fuelled by
expansion in the distribution channel and a growing ecosystem.
M-Pesa contributes 8.9% of International revenue, with R13.6 billion
moved through the systemmonthly. It has been pleasing to see
that M-Pawa, our savings and loans product, has been gaining
traction with 1.6 million customers actively using the service.
We have also recently launched international money transfer and
are seeing good uptake on this service. Despite its success in our
International markets, M-Pesa has had a slow uptake in South Africa,
where there are key differences in the banking sector and as
a result, we have decided to focus on M-Pesa only in our
International operations.
Looking to the year ahead, we anticipate that the market may
temporarily be slower whilst channels and customers familiarise
themselves with customer registration requirements in the DRC,
Tanzania and Mozambique.
Our performance
Our business
Governance review
Administration
Overview