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VOD
VOD
VOD - Vodacom Group - Trading statement for the quarter ended 30 June 2010
Vodacom Group Limited
Incorporated in the Republic of South Africa
(`Vodacom Group` or `Vodacom`)
Registration number 1993/005461/06
Share code: VOD & ISIN: ZAE000132577
News release
22 July 2010
TRADING STATEMENT FOR THE QUARTER ENDED 30 JUNE 2010
Key highlights
* Robust South African performance
- Service revenue up 4.4% (8.2% excluding the MTR impact)
- 15.7% increase in the contract customer base
- Prepaid customer growth impacted by a change in the
disconnection policy and RICA (note 1)
* Excellent progress in mobile broadband
- 43.2% growth in Group data revenue to R1 350 million
(33.9% excluding rule change)(note 2)
- 54.5% increase in South African data traffic
- Continued investment in mobile broadband and fibre
networks
* International operations slowly recovering
- Almost one million net customer additions
- Revenue in constant currency stable on prior year
Pieter Uys, Chief Executive Officer, commented:
"This was a positive start to our financial year with
overall Group service revenue increasing 3.1% in constant
currency. Our continued focus on broadband leadership paid
off with Group data revenue growing 43.2%.
Excluding the impact of mobile termination rates (`MTRs`),
South Africa`s service revenue growth of 8.2% reflected
robust growth in data revenue and gains on the voice side.
Lower MTRs had a negative impact of approximately R393
million on revenue in the quarter. We pressed ahead with
actions to deliver greater value to customers launching
prepaid promotions and reducing data and voice contract
tariffs.
We are pleased to see that the actions we have taken in
our key international markets are slowly paying off. We
added almost one million customers in the quarter and
revenue in constant currency was stable year on year."
Notes:
1. Regulation of Interception of Communications and
Provision of Communication-Relation Information Act.
2. 60-day carry over rule introduced in May 2009 for data
packages.
Group
Group revenue and service revenue for the three months
ended 30 June 2010 increased in constant currency by 3.0%
and 3.1% respectively, with continued robust performance
in South Africa and a 43.2% growth in Group data revenue.
The South African rand strengthened against all the other
functional currencies in the international operations,
resulting in lower reported Group revenue growth of 0.7%
and service revenue growth of 0.6%. The South African
mobile operations contributed 87.2% (March 2010: 87.4%) of
Group revenue.
Group customers increased 1.1 million in the quarter,
excluding the reduction of 3.3 million call-forward SIMs
in South Africa on 1 April 2010, as discussed below,
resulting in total Group mobile customers of 37.7 million
at 30 June 2010. The South African mobile operations
contributed 61.4% (March 2010: 65.8%) of Group total
mobile customers at 30 June 2010.
South Africa
The South African operations posted solid revenue growth
of 3.8% to R12 567 million, despite the 18.3% decline in
interconnect revenue. Service revenue growth of 8.2%
(excluding the impact of MTRs) was supported by the
increasing contribution from data revenue which now
comprises 11.9% of service revenue. Data revenue increased 43.2% to R1 307
million due to data traffic growth of 54.5%, which was driven by more than 50%
growth in smartphones, lower device and usage prices and improved coverage
through continued investment in 3G and fibre networks. Data revenue growth was
impacted by the change in the data carry-over rule in the prior year, excluding
this impact data revenue growth was 33.8%.
The South African customer base declined by 3.1 million to
23.2 million in the quarter mainly due to the change in
the disconnection policy of 13 months to seven months for
call-forward SIMs. Excluding the impact of the
disconnection policy, prepaid customers declined by 11.9%
year on year due to RICA. Prepaid ARPU increased 19.7% to
R79 largely as a result of the lower customer base.
Contract customer growth remained strong, up 15.7% to 4.7
million customers, now representing 20.2% of the South
African customer base (March 2010: 17.1%). Contract ARPU
declined 7.4% to R411 due to the strong growth of
lower-end contract packages and reduced out-of-bundle
spend.
During the quarter, various new value offerings were
introduced such as free contract bundle minutes and lower
prepaid tariff plans, resulting in an increase in outgoing
traffic of 4.6% (excluding Night shift and Extra time free
minutes).
International
The international operations recorded strong customer
growth of 15.8% year on year to 14.6 million, adding
almost one million customers in the quarter mainly from
Tanzania where the market has responded well to the newly
introduced tariff plans.
Revenue in the international mobile operations in constant
currency declined by 0.4%. Including the effect of
foreign exchange movements, revenue declined 14.5% to R1
922 million. The international segment revenue has been
restated to include Gateway of R709 million (US$94
million) in the quarter.
The quarterly information has not been audited or reviewed
by Vodacom`s external auditors.
Revenue for the quarters ended
June March June
2010 2010 2009
Rm
South Africa 12 567 12 621 12 107
International(1) 1 922 1 880 2 247
Corporate and eliminations (83) (66) (50)
Total revenue 14 406 14 435 14 304
Year on year Quarterly
% change % change
Rm
South Africa 3.8 (0.4)
International(1) (14.5) 2.2
Corporate and eliminations (66.0) (25.8)
Total revenue 0.7 (0.2)
Key performance indicators for the quarters ended
South Africa
June March June
2010 2010 2009
Customers (thousand)(2) 23 161 26 262 28 735
Prepaid(6) 18 489 21 765 24 696
Contract 4 672 4 497 4 039
Churn (%)(3) 87.2 42.9 34.1
Prepaid(6) 105.0 49.6 38.3
Contract 9.5 9.1 9.2
Traffic (millions of
minutes)(4) 6 371 6 379 6 896
Outgoing 4 442 4 434 4 966
Incoming 1 929 1 945 1 930
Total ARPU (rand per
month)(5) 148 140 123
Prepaid(6) 79 74 66
Contract 411 436 444
Year on year Quarterly
% change % change
Customers (thousand)(2) (19.4) (11.8)
Prepaid(6) (25.1) (15.1)
Contract 15.7 3.9
Churn (%)(3)
Prepaid(6)
Contract
Traffic (millions of
minutes)(4) (7.6) (0.1)
Outgoing (10.6) 0.2
Incoming (0.1) (0.8)
Total ARPU (rand per month)(5) 20.3 5.7
Prepaid(6) 19.7 6.8
Contract (7.4) (5.7)
International
June March June
2010 2010 2009
Customers (thousand)(2) 14 561 13 630 12 571
Tanzania 8 009 7 270 5 917
DRC(7) 3 419 3 353 4 182
Mozambique 2 411 2 329 1 925
Lesotho 722 678 547
Churn (%)(3)
Tanzania 42.9 42.3 47.9
DRC(7) 77.5 50.9 59.8
Mozambique 76.9 68.9 48.3
Lesotho 17.2 17.4 20.0
Total ARPU (rand per
month)(5)
Tanzania 22 25 35
DRC(7) 39 31 39
Mozambique 22 23 36
Lesotho 62 63 65
Total ARPU (local
currency)(5)
Tanzania (Tanzanian
shilling) 4 127 4 472 5 511
DRC (USD)(7) 5.2 4.3 4.7
Mozambique (Metical) 98 96 114
Year on year Quarterly
% change % change
Customers (thousand)(2) 15.8 6.8
Tanzania 35.4 10.2
DRC(7) (18.2) 2.0
Mozambique 25.2 3.5
Lesotho 32.0 6.5
Churn (%)(3)
Tanzania
DRC(7)
Mozambique
Lesotho
Total ARPU (rand per month)(5)
Tanzania (37.1) (12.0)
DRC(7) - 25.8
Mozambique (38.9) (4.3)
Lesotho (4.6) (1.6)
Total ARPU (local currency)(5)
Tanzania (Tanzanian shilling) (25.1) (7.7)
DRC (USD)(7) 10.6 20.9
Mozambique (Metical) (14.0) 2.1
Historical key performance indicators for the quarters
ended
Revenue
June March December
Rm 2010 2010 2009
South Africa 12 567 12 621 13 439
International(1) 1 922 1 880 2 049
Corporate and
eliminations (83) (66) (63)
Total revenue 14 406 14 435 15 425
September June
Rm 2009 2009
South Africa 12 264 12 107
International(1) 2 194 2 247
Corporate and eliminations (87) (50)
Total revenue 14 371 14 304
March December
Rm 2009 2008
South Africa 12 420 12 503
International(1) 2 479 2 093
Corporate and eliminations (103) (40)
Total revenue 14 796 14 556
South Africa
June March December
2010 2010 2009
Customers (thousand)(2) 23 161 26 262 27 102
Prepaid(6) 18 489 21 765 22 753
Contract 4 672 4 497 4 349
Churn (%)(3) 87.2 42.9 41.5
Prepaid(6) 105.0 49.6 47.5
Contract 9.5 9.1 8.8
Traffic (millions of
minutes)(4) 6 371 6 379 6 655
Outgoing 4 442 4 434 4 632
Incoming 1 929 1 945 2 023
Total ARPU (rand per
month)(5) 148 140 140
Prepaid(6) 79 74 76
Contract 411 436 455
September June
2009 2009
Customers (thousand)(2) 28 204 28 735
Prepaid(6) 24 045 24 696
Contract 4 159 4 039
Churn (%)(3) 35.6 34.1
Prepaid(6) 40.1 38.3
Contract 8.2 9.2
Traffic (millions of minutes)(4) 6 745 6 896
Outgoing 4 760 4 966
Incoming 1 985 1 930
Total ARPU (rand per month)(5) 125 123
Prepaid(6) 66 66
Contract 461 444
March December
2009 2008
Customers (thousand)(2) 27 625 26 450
Prepaid(6) 23 679 22 583
Contract 3 946 3 867
Churn (%)(3) 36.5 39.4
Prepaid(6) 40.9 44.6
Contract 10.5 9.9
Traffic (millions of minutes)(4) 6 189 6 402
Outgoing 4 225 4 382
Incoming 1 964 2 020
Total ARPU (rand per month)(5) 129 140
Prepaid(6) 67 77
Contract 460 473
International
June March December
2010 2010 2009
Customers (thousand)(2) 14 561 13 630 13 352
Tanzania 8 009 7 270 6 878
DRC(7) 3 419 3 353 3 522
Mozambique 2 411 2 329 2 312
Lesotho 722 678 640
Churn (%)(3)
Tanzania 42.9 42.3 43.3
DRC(7) 77.5 50.9 157.5
Mozambique 76.9 68.9 61.1
Lesotho 17.2 17.4 19.5
Total ARPU (rand per
month)(5)
Tanzania 22 25 28
DRC(7) 39 31 35
Mozambique 22 23 27
Lesotho 62 63 73
Total ARPU (local
currency)(5)
Tanzania (Tanzanian
shilling) 4 127 4 472 5 060
DRC (USD)(7) 5.2 4.3 4.7
Mozambique (Metical) 98 96 109
September June
2009 2009
Customers (thousand)(2) 13 384 12 571
Tanzania 6 260 5 917
DRC(7) 4 404 4 182
Mozambique 2 134 1 925
Lesotho 586 547
Churn (%)(3)
Tanzania 48.6 47.9
DRC(7) 57.1 59.8
Mozambique 66.1 48.3
Lesotho 20.8 20.0
Total ARPU (rand per month)(5)
Tanzania 31 35
DRC(7) 39 39
Mozambique 34 36
Lesotho 68 65
Total ARPU (local currency)(5)
Tanzania (Tanzanian shilling) 5 246 5 511
DRC (USD)(7) 4.9 4.7
Mozambique (Metical) 119 114
March December
2009 2008
Customers (thousand)(2) 11 989 11 321
Tanzania 5 667 5 355
DRC(7) 4 170 4 042
Mozambique 1 634 1 435
Lesotho 518 489
Churn (%)(3)
Tanzania 43.3 41.0
DRC(7) 48.8 46.2
Mozambique 59.1 73.1
Lesotho 18.2 21.1
Total ARPU (rand per month)(5)
Tanzania 43 54
DRC(7) 53 70
Mozambique 44 51
Lesotho 67 75
Total ARPU (local currency)(5)
Tanzania (Tanzanian shilling) 5 729 7 191
DRC (USD)(7) 5.2 7.1
Mozambique (Metical) 117 133
Notes:
1. The international segment revenue has been restated to
include Gateway from 1 April 2010.
2. Customer totals are based on the total number of
customers registered on Vodacom`s network, which have
not been disconnected, including inactive customers, at
the end of the period indicated.
3. Churn is calculated by dividing the annualised number
of disconnections during the period by the average
monthly total reported customer base during the period.
4. Traffic comprises total traffic registered on Vodacom`s
network, including bundled minutes, promotional minutes
and outgoing international roaming calls, but excluding
national roaming calls, incoming international roaming
calls and calls to free services.
5. Total ARPU is calculated by dividing average monthly
recurring revenue by the average monthly total reported
customers during the period. Total ARPU excludes
revenue from equipment sales and non-service revenue.
Prepaid and contract ARPU only includes recurring
revenue generated from Vodacom customers.
6. South Africa changed its disconnection policy for
call-forward SIMs from 13 months to seven months during
the quarter ended 30 June 2010. Prior period numbers
have not been restated.
7. The DRC changed its disconnection policy from 215 to 90
inactive days during the quarter ended 31 December
2009. Prior period numbers have not been restated.
Revenue for the quarter ended 30 June 2010
South Yoy % International
Africa change
Rm
Mobile voice 6 836 3.8 876
Mobile interconnect 1 639 (18.3) 143
Mobile messaging 778 12.3 53
Mobile data 1 307 43.2 43
Other service
revenue 409 34.5 744
Service revenue 10 969 4.4 1 859
Equipment revenue 1 421 6.9 30
Non-service revenue 177 (35.2) 33
Revenue 12 567 3.8 1 922
Yoy % Corporate/
change Eliminations
Rm
Mobile voice (14.9) -
Mobile interconnect (32.9) (16)
Mobile messaging (29.3) -
Mobile data 43.3 -
Other service revenue (12.0) (54)
Service revenue (15.2) (70)
Equipment revenue (11.8) (6)
Non-service revenue 57.1 (7)
Revenue (14.5) (83)
Group Yoy %
change
Rm
Mobile voice 7 712 1.2
Mobile interconnect 1 766 (19.9)
Mobile messaging 831 8.1
Mobile data 1 350 43.2
Other service revenue 1 099 (4.1)
Service revenue 12 758 0.6
Equipment revenue 1 445 7.0
Non-service revenue 203 (25.9)
Revenue 14 406 0.7
Average quarterly exchange rates
June March June
2010 2010 2009
USD/ZAR 7.55 7.51 8.50
ZAR/MZN 4.52 4.09 3.20
ZAR/TZS 188.02 180.30 157.06
EUR/ZAR 9.60 10.40 11.57
Year on year Quarterly
% change % change
USD/ZAR (11.2) 0.5
ZAR/MZN 41.3 10.5
ZAR/TZS 19.7 4.3
EUR/ZAR (17.0) (7.7)
Investor Relations Media Relations
Belinda Williams Richard Boorman
+27 11 653 5195 +27 11 653 5794
Sponsor: UBS South Africa (Pty) Ltd
Forward-looking statements
This announcement which sets out the trading statement for
Vodacom Group Limited for the quarter ended 30 June 2010
contains `forward-looking statements` with respect to the
Group`s financial position, results of operations and
businesses and certain of the Group`s plans and
objectives. In particular, such forward-looking statements
include statements relating to: the Group`s future
performance; future capital expenditures, acquisitions,
divestitures, expenses, revenue, financial positions,
dividend policy, and future prospects; business and
management strategies relating to the expansion and growth
of the Group; the effects of regulation of the Group`s
businesses by governments in the countries in which it
operates; the Group`s expectations as to the launch and
roll out dates for products, services or technologies;
expectations regarding the operating environment and
market conditions; growth in customers and usage; and the
rate of dividend growth by the Group.
Forward-looking statements are sometimes, but not always,
identified by their use of a date in the future or such
words as `will`, `anticipates`, `aims`, `could`, `may`,
`should`, `expects`, `believes`, `intends`, `plans` or
`targets`. By their nature, forward-looking statements are
inherently predictive, speculative and involve risk and
uncertainty because they relate to events and depend on
circumstances that will occur in the future, involve known
and unknown risks, uncertainties and other facts or
factors which may cause the actual results, performance or
achievements of the Group, or its industry to be
materially different from any results, performance or
achievement expressed or implied by such forward-looking
statements. Forward-looking statements are not guarantees
of future performance and are based on assumptions
regarding the Group`s present and future business
strategies and the environments in which it operates now
and in the future.
www.vodacom.com
Date: 22/07/2010 07:05:02 Produced by the JSE SENS Department.
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