| Wed 2 Feb 2011, 13:06 | | VOD - Vodacom Group Limited - Trading Statement for the Quarter Ended 31 |
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VOD
VOD
VOD - Vodacom Group Limited - Trading Statement for the Quarter Ended 31
December 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
TRADING STATEMENT FOR THE QUARTER ENDED 31 DECEMBER 2010
KEY HIGHLIGHTS
SOLID GROUP PERFORMANCE
Group revenue up 5.6%(*) (3.9% reported)
Group service revenue up 4.8%(*) (4.0% reported)
Group customers of 41.6 million, adding 2.2 million in the quarter
STRONG COMMERCIAL SUCCESS IN SOUTH AFRICA
Revenue up 4.7%
Service revenue up 3.7%(*) (4.8% reported)
Customers of 25.3 million, adding 1.4 million in the quarter
More value offered with average effective price per minute down 22.4%
Outgoing voice traffic up 36.2% to 6.3 billion minutes
HIGH DEMAND FOR MOBILE DATA SERVICES IN SOUTH AFRICA
Data revenue growth of 33.8%(*) (50.5% reported)
54.6% increase in data usage
8.7 million data users, 36.2% of the active customer base
2.1 million active data bundle users, up 245 000 from previous quarter
IMPROVED GROWTH TRENDS IN INTERNATIONAL OPERATIONS
Service revenue up 13.2%(*) (0.3% reported)
Customers of 16.3 million, adding 784 000 in the quarter
Challenging trading conditions in the DRC and Gateway
PIETER UYS, CHIEF EXECUTIVE OFFICER, COMMENTED:
"I`m pleased with the Group service revenue growth of 4.8%(*), against the
backdrop of strong competition and headwinds from lower mobile termination
rates. Our strategy of focusing on operational delivery and offering increased
value to customers has paid off with Group customers increasing by more than two
million to 41.6 million. In South Africa, the data business was a star performer
with growth in mobile connect cards and smartphones driving a 33.8%(*) increase
in overall data revenue. The International operations also continued to respond
well to management actions with service revenue growth of 13.2%(*)."
GROUP
Group revenue and service revenue for the three months ended 31 December 2010
increased by 5.6%(*) and 4.8%(*) respectively, with continued robust performance
in South Africa and a 36.2%(*) growth in Group data revenue. Reported Group
revenue and service revenue growth was 3.9% and 4.0% respectively.
Group customers increased 2.2 million in the quarter, resulting in total Group
customers of 41.6 million at 31 December 2010.
SOUTH AFRICA
The South African operations posted solid revenue growth of 4.7% to R14 072
million, despite the 15.6% decline in interconnect revenue. Service revenue
growth of 7.3%(*) (excluding the impact of MTR reduction) was supported mainly
by the increasing contribution from data revenue and stronger customer and usage
growth stimulated by focused promotional activity during the quarter.
Data revenue increased 33.8%(*) to R1 746 million as demand for data services
remained high. Data users increased by 780 000 in the quarter to reach 8.7
million at 31 December 2010, of which 2.1 million were active data bundle
users. Active smartphones on the network were up 71.8% to 3.1 million and mobile
connect cards were up 52.2% to 1.0 million on the previous year. Increased value
offers to stimulate usage and higher adoption of data bundles resulted in a
13.9% drop in the effective price per megabyte.
The South African customer base grew by 1.4 million in the quarter to 25.3
million due to successful commercial initiatives. Prepaid customers closed at
20.3 million adding 1.2 million in the quarter. Contract customer growth
remained strong, adding 200 000 to close at 5.0 million customers.
Total ARPU increased 17.9% year on year to R165, largely as a result of higher
minutes of use and the lower customer base resulting from the change in the
disconnection rule, offset by a reduction in the average effective price per
minute of 22.4%. Prepaid ARPU was up 22.4% to R93 and contract ARPU declined
10.3% to R408 due to the strong growth of lower-end contract packages.
We continue to invest in expanding our data coverage and enhancing our
customers` experience. We are also planning an additional R200 million spend in
the upcoming quarter as an intensified drive to improve the customer experience
and brand identity.
INTERNATIONAL
Revenue in the International operations increased by 12.6%(*) to R2 056 million.
Including the effect of foreign exchange movements, revenue declined 0.5%.
Service revenue growth was up 13.2%(*) (reported 0.3%) with strong performance
from the operations in Tanzania, Mozambique and Lesotho, but trading conditions
remain challenging in the DRC and Gateway operations.
The International operations recorded customer growth of 22.0% year on year to
16.3 million, adding approximately 784 000 customers in the quarter.
(*) All amounts in this document marked with an "(*)" represent underlying
growth which excludes the impact of accounting reclassifications and is stated
at constant currencies.
The quarterly information has not been audited or reviewed by Vodacom`s external
auditors.
REVENUE FOR THE QUARTERS ENDED
Rm December September December Year on Quarterly
year
2010 2010 2009 % change % change
South Africa 14 072 13 130 13 439 4.7 7.2
International 2 056 2 080 2 066 (0.5) (1.2)
Corporate and (95) (100) (80) (18.8) 5.0
eliminations
Revenue 16 033 15 110 15 425 3.9 6.1
KEY PERFORMANCE INDICATORS FOR THE QUARTERS ENDED
SOUTH AFRICA
December September December Year on Quarterly
year
2010 2010 2009 % change % change
Customers
(thousand)1 25 302 23 873 27 102 (6.6) 6.0
Prepaid2 20 310 19 074 22 753 (10.7) 6.5
Contract 4 992 4 799 4 349 14.8 4.0
Churn (%)3 32.7 35.9 41.5
Prepaid2 38.3 42.5 47.5
Contract 10.3 9.6 8.8
Traffic
(millions of 8 402 7 352 6 655 26.3 14.3
minutes)4
Outgoing 6 307 5 351 4 632 36.2 17.9
Incoming 2 095 2 001 2 023 3.6 4.7
MOU per 114 105 80 42.5 8.6
month5
Prepaid2 92 79 55 67.3 16.5
Contract 202 207 220 (8.2) (2.4)
Total ARPU
(rand per 165 162 140 17.9 1.9
month)6
Prepaid2 93 90 76 22.4 3.3
Contract 408 411 455 (10.3) (0.7)
INTERNATIONAL
December September December Year on Quarterly
year
2010 2010 2009 % change % change
Customers
(thousand)1 16 288 15 504 13 352 22.0 5.1
Tanzania 8 665 8 421 6 878 26.0 2.9
DRC 3 847 3 638 3 522 9.2 5.7
Mozambique 2 953 2 676 2 312 27.7 10.4
Lesotho 823 769 640 28.6 7.0
Churn (%)3
Tanzania 41.5 41.9 43.3
DRC 80.8 91.1 157.5
Mozambique 45.3 65.3 61.1
Lesotho 24.6 20.2 19.5
MOU per
month5
Tanzania 58 55 74 (21.6) 5.5
DRC 74 77 37 100.0 (3.9)
Mozambique 43 49 33 30.3 (12.2)
Lesotho 32 33 49 (34.7) (3.0)
Total ARPU
(rand per
month)6
Tanzania 20 21 28 (28.6) (4.8)
DRC 32 39 35 (8.6) (17.9)
Mozambique 23 22 27 (14.8) 4.5
Lesotho 62 60 73 (15.1) 3.3
Total ARPU
(local
currency)6
Tanzania 4 330 4 393 5 060 (14.4) (1.4)
(TZS)
DRC (USD) 4.7 5.3 4.7 - (11.3)
Mozambique 115 109 109 5.5 5.5
(MZN)
HISTORICAL KEY PERFORMANCE INDICATORS FOR THE QUARTERS ENDED
REVENUE
Decem- Septem- June March Decem- Septem- June
ber ber ber ber
Rm 2010 2010 2010 2010 2009 2009 2009
South 14 072 13 130 12 567 12 621 13 439 12 264 12 107
Africa
Internatio 2 056 2 080 1 922 1 893 2 066 2 211 2 250
nal
Corporate (95) (100) (83) (79) (80) (104) (53)
and
eliminatio
ns
Revenue 16 033 15 110 14 406 14 435 15 425 14 371 14 304
SOUTH AFRICA
Decem- Septem- June March Decem- Septem- June
ber ber ber ber
2010 2010 2010 2010 2009 2009 2009
Customers 25 302 23 873 23 161 26 262 27 102 28 204 28 735
(thousand)1
Prepaid2 20 310 19 074 18 489 21 765 22 753 24 045 24 696
Contract 4 992 4 799 4 672 4 497 4 349 4 159 4 039
Churn (%)3 32.7 35.9 87.2 42.9 41.5 35.6 34.1
Prepaid2 38.3 42.5 105.0 49.6 47.5 40.1 38.3
Contract 10.3 9.6 9.5 9.1 8.8 8.2 9.2
Traffic
(millions 8 402 7 352 6 371 6 379 6 655 6 745 6 896
of
minutes)4
Outgoing 6 307 5 351 4 442 4 434 4 632 4 760 4 966
Incoming 2 095 2 001 1 929 1 945 2 023 1 985 1 930
MOU per 114 105 86 80 80 78 81
month5
Prepaid2 92 79 59 53 55 53 58
Contract 202 207 205 214 220 226 222
Total ARPU
(rand per 165 162 148 140 140 125 123
month)6
Prepaid2 93 90 79 74 76 66 66
Contract 408 411 411 436 455 461 444
INTERNATIONAL
Decem- Septem- June March Decem- Septem- June
ber ber ber ber
2010 2010 2010 2010 2009 2009 2009
Customers 16 288 15 504 14 561 13 630 13 352 13 384 12 571
(thousand)1
Tanzania 8 665 8 421 8 009 7 270 6 878 6 260 5 917
DRC 3 847 3 638 3 419 3 353 3 522 4 404 4 182
Mozambique 2 953 2 676 2 411 2 329 2 312 2 134 1 925
Lesotho 823 769 722 678 640 586 547
Churn (%)3
Tanzania 41.5 41.9 42.9 42.3 43.3 48.6 47.9
DRC 80.8 91.1 77.5 50.9 157.5 57.1 59.8
Mozambique 45.3 65.3 76.9 68.9 61.1 66.1 48.3
Lesotho 24.6 20.2 17.2 17.4 19.5 20.8 20.0
MOU per
month5
Tanzania 58 55 58 69 74 34 34
DRC 74 77 56 44 37 32 28
Mozambique 43 49 29 28 33 35 42
Lesotho 32 33 31 33 49 34 34
Total ARPU
(rand per
month)6
Tanzania 20 21 22 25 28 31 35
DRC 32 39 39 31 35 39 39
Mozambique 23 22 22 23 27 34 36
Lesotho 62 60 62 63 73 68 65
Total ARPU
(local
currency)6
Tanzania 4 330 4 393 4 127 4 472 5 060 5 246 5 511
(TZS)
DRC (USD) 4.7 5.3 5.2 4.3 4.7 4.9 4.7
Mozambique 115 109 98 96 109 119 114
(MZN)
NOTES:
1. Customers are based on the total number of mobile customers
registered on Vodacom`s network, which have not been
disconnected, including inactive customers, at the end of the
period indicated.
2. 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.
3. Churn is calculated by dividing the annualised number of
disconnections during the period by the average monthly total
reported mobile customer base during the period.
4. Traffic comprises total traffic registered on Vodacom`s mobile
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. Minutes of use (`MOU`) per month is calculated by dividing the
average monthly minutes (traffic) during the period by the
average monthly total reported mobile customers during the
period.
6. Total ARPU is calculated by dividing average monthly service
revenue by the average monthly total reported mobile customers
during the period. Total ARPU excludes revenue from equipment
sales and other non-service revenue. Prepaid and contract ARPU
only include service revenue generated from Vodacom customers.
REVENUE FOR THE QUARTER ENDED 31 DECEMBER 2010
Rm South Yoy % Inter- Yoy % Corpo- Group Yoy %
Africa change natio- change rate/ change
nal Elimi-
na-
tions
Mobile 7 433 4.0 898 (10.9) - 8 331 2.2
voice
Mobile 1 778 (15.6) 138 (19.3) (29) 1 887 (16.8)
inter-
connect
Mobile 644 (18.0) 59 - - 703 (16.7)
messaging1
Mobile 1 746 50.5 65 109.7 - 1 811 51.9
data1
Other 564 39.3 841 15.7 (49) 1 356 24.4
service
revenue2
Service 12 165 4.8 2 001 0.3 (78) 14 088 4.0
revenue
Equipment 1 850 13.1 28 (36.4) (5) 1 873 12.7
revenue
Non- 57 (71.4) 27 3.8 (12) 72 (66.4)
service
revenue2
Revenue 14 072 4.7 2 056 (0.5) (95) 16 033 3.9
NOTES:
1. Year to date revenue of R194 million, mainly relating to
telemetry, has been reclassified from mobile messaging to
mobile data revenue in the quarter (Vodafone alignment).
2. Year to date revenue of R134 million, mainly relating to tower
sharing and returned debit order fees, has been reclassified
from non-service revenue to other service revenue in the
quarter (Vodafone alignment).
AVERAGE QUARTERLY EXCHANGE RATES
December September December Year on Quarterly
year
2010 2010 2009 % change % change
USD/ZAR 6.90 7.32 7.51 (8.1) (5.7)
ZAR/MZN 5.12 4.96 3.92 30.6 3.2
ZAR/TZS 215.19 206.95 177.51 21.2 4.0
EUR/ZAR 9.37 9.45 11.09 (15.5) (0.8)
FORWARD-LOOKING STATEMENTS
This announcement which sets out the trading statement for Vodacom Group Limited
for the quarter ended 31 December 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.
Midrand
2 February 2011
Sponsor
UBS South Africa (Pty) Ltd
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