Vodacom

1 Customer

Best network

Our significant investment in our mobile and fixed network infrastructure and IT capabilities remains an important source of competitive differentiation. This year, we invested R12.9 billion in infrastructure across the Group (a capital intensity of 16.1%), expanding our network coverage and performance, and improving the overall customer experience. At the same time, through our Technology Efficiency programme we have delivered on the operating expenditure cost savings objectives relating to energy, leases and rentals, transmission rental costs, and maintenance, thereby reducing the impact on our cost base from the higher number of base stations in the network.

Network NPS

Best value

In South Africa, we made good progress this year in our pricing transformation strategy, offering customers more personalised packages that provide them with greater value. At year end, 85.1% of our contract customers were on new integrated price plans with better value offerings. This has been achieved through programmes such as ‘Next best activity’, which assists customers in choosing packages best suited to their needs and mix of services used at the time of upgrade. These contracts include much more value in terms of minutes, messages and megabytes, providing customers with a worry-free experience. We are seeing the benefits of this pricing transformation, with record low contract churn of 8.5% and improved average revenue per user (ARPU). 71.3% of our contract revenue is now in bundle.

On prepaid, we have evolved our bundle strategy into a much more personalised experience for customers. We have used our strength in customer value management effectively to target customers with personalised offers not publicly advertised. We are seeing very good results from the ‘Just 4 You’ platform, which profiles customers’ behaviour and presents them with personalised offers. We now have a full suite of offerings ranging from time-based micro-bundles for hand-to-mouth consumption (such as: R2 for 10 minutes that expire within 10 minutes of loading; R4 for one hour that expires within an hour of loading; and R7 for an hour for the day) to integrated bundles and personalised offers. We sold 763 million prepaid voice bundles for the year, with the total number of voice bundles sold up 36.5% compared to last year. This has resulted in a 16.9% reduction in our average effective price-per-minute for calls.

Our data bundles now include a number of affordable daily, weekly and monthly options, from small ‘bite size’ bundles of 10MB to larger bundles such as 5GB. We saw an 85.9% increase in the number of data bundles sold, selling 343 million data bundles for the year, resulting in a 13.6% reduction in the average effective price per megabyte of data.

We have also continued our efforts in lowering the prices of smart data devices, aided by the purchasing power we enjoy through the Vodafone Procurement Company, but are expecting this to be constrained by higher import costs due to poor exchange rates.

Our performance

• Blended price per minute reduced 16.9% to 54 cents in South Africa.
• Prepaid price per minute reduced 17.8% to 37 cents in South Africa.
• Effective price per MB reduced by 13.6% in South Africa and 28.6% in International.
• Data traffic grew 46.8% in South Africa and 73.1% in International.
• In South Africa: 85.1% of contract customers are on integrated tariffs and contract churn reduced from 9.2% to 8.5%.

Best service

Our ambition is to position Vodacom as Africa’s best telecommunications company at delivering unmatched customer experience at every point that a customer engages with our brand. To achieve this, 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 – We will be guaranteeing network satisfaction in terms of speed, reliability and coverage, and are taking a more proactive approach in checking coverage and call quality.
• Always in control – We aim to ensure that customers have full control of their spend and do not have any surprises from bill shock. Using the MyVodacom App, customers can easily view balances, buy bundles and manage their account with Vodacom, free of charge. We have extended our international roaming product, Travel Saver, from 27 to 180 countries.
• Rewarding loyalty – We are rewarding long-term customers for being part of the Vodacom family, and are refreshing our existing postpaid and prepaid loyalty programmes.
• Easy access – We are maximising the efficiency and availability of customer support, digitizing our customer experience, introducing voice biometrics in the call centres, increasing functionality and improving processes. We launched our first Business in Retail service in store with a dedicated enterprise desk and by year end ten stores had implemented the integrated Business in Retail model. Roaming customers can call our call centre 24/7 at no charge.

Accompanying these ambitious CARE initiatives, we are introducing in South Africa a new customer management and billing system that is needed as we transition from a predominately mobile company to a unified communications provider. We have recently commenced the migration to our Customer 3D (C3D) programme, and expect to complete the move over of all contract customers in the first half of the new financial year.