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CEO’s
statement
Shameel Aziz Joosub
Pleasing performance in a challenging
context
This has been another year of pleasing performance in
a challenging operating environment. Our South African
business continues to perform well, supported by
strong customer gains and good growth in data and
enterprise services. As we expected, our International
operations had a more difficult year. Growth slowed as
a result of customer disconnections in the prior year,
in compliance with customer registration requirements,
and there was the added impact of high exchange rate
volatility in some of our markets.
Group revenue increased 1.5% this year to R81.3 billion, with service
revenue up 2.3% to R68.3 billion; normalised for the effects of
foreign currency translation this was up 3.4%* and 4.4%* respectively,
driven by a 16.4% increase in data revenue to R24.8 billion, and a
12.2% growth in enterprise revenue. In South Africa, customer
growth was strong at 8.6%, with 3.0 million new customers. In our
International operations, customers increased 9.3% to 29.7 million,
signalling a return to positive net additions, after 4 million
customers were disconnected due to customer registration
requirements in the prior year. Group EBITDA grew 2.9% to
R31.2 billion, up 7.1%*, excluding foreign currency translation
impacts, with headline earnings per share up 4.5% to 923 cents
per share, and a final dividend per share of 435 cents.
Our strong overall performance was achieved through the
successful execution of our strategy of investing significantly in
network infrastructure, providing segmented and personalised
pricing plans, and targeting revenue growth in data, M-Pesa and
enterprise, underpinned by our continuing cost-efficiency drive.
Over the past three years, we have invested R37.5 billion in
network infrastructure, further expanding our 2G, 3G and 4G
coverage, increasing data speeds, and reducing our dropped-call
rate across the region. With our network quality being a key
competitive differentiator, we have successfully monetised this
investment and delivered the return on capital, maintaining a
strong lead in NPS for network quality and coverage in all our
markets other than Tanzania and Mozambique, both of which
have shown significant improvement. Investment in our internal
systems enabled the rollout of our initial activities in big data,
such as our ‘Just 4 You’ platform, and included a complete
overhaul of our customer back-end billing systems
in South Africa.
In our South Africa segment we are seeing positive outcomes from
our pricing transformation strategy and our personalised package
offerings, with our ‘Just 4 You’ platform driving the sale of over
1.5 billion voice and data bundles over the year. Prepaid customers
reached 32.0 million, up 9.3%, driven by the success of an improved
value proposition through ‘Just 4 You’ offers, the successful launch
of our Youth (NXT LVL) proposition and a highly engaging summer
promotion. We added 218 000 contract customers during the year,
and improved loyalty, evidenced in the low contract churn of 4.2%,
and we increased contract ARPU by 2.8% to R408. As part of our
commitment to democratising Internet access, we are driving
down customers’ data costs, reducing our effective rate for data
by 16.0%, which over the last four years is a 54.1% decrease in
data prices. We have introduced an enhanced smart notification
service to pre-empt customers’ out-of-bundle expenses, and we
are running targeted consumer campaigns to increase awareness
on how to purchase maximum-value bundles, check balances
and more efficiently manage purchased data. We will launch other
initiatives to address out-of-bundle pricing. In January this year, we
launched our Siyakha platform in South Africa, offering very
low-cost voice and data bundles, entry-level smartphones, and
targeted content offerings, including free access to content on
specific education, health and employment websites, and a free,
text-based version of Facebook.
* Normalised growth adjusted for trading foreign exchange gains/losses and at a constant currency (using current period as base), (collectively ‘foreign exchange’).
Vodacom Group Limited
Integrated report for the year ended 31 March 2017
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