| Thu 21 Jul 2011, 7:05 | | VOD - Vodacom Group Limited - Vodacom Group Limited trading statement for |
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VOD
VOD
VOD - Vodacom Group Limited - Vodacom Group Limited trading statement for
the quarter ended 30 June 2011
Vodacom Group Limited
(Incorporated in the Republic of South Africa)
(Registration number 1993/005461/06)
(JSE share code: VOD) ISIN: ZAE000132577
(`Vodacom`)
News release
21 July 2011
Vodacom Group Limited trading statement for the quarter ended 30 June
2011
Highlights
Brand refresh underpins solid Group performance
- Group revenue up 8.1% (9.6%*)
- Group service revenue up 5.9% (7.5%*)
- Group customers up 20.4% to 45.4 million
- Net customer additions of 1.9 million in the quarter
Continued robust data growth
- Group data revenue growth of 37.6%
- 43.3% increase in Group active data customers to 10.9 million
- Mobile internet bundle customers up 86.0% to 3.0 million
Strong commercial success in South Africa
- Revenue up 7.7%
- Service revenue up 5.0% (7.4% excluding the impact of MTRs)
- Customers up 19.7% to 27.7 million, adding 1.2 million in the quarter
- Data revenue growth of 35.4%
Encouraging revenue trends in International operations
- Service revenue up 11.0% (23.7%*)
- Customers up 21.5% to 17.7 million, adding 729 000 in the quarter
Pieter Uys, Vodacom Group CEO commented:
"This quarter started on a high note with our team delivering a really well
executed brand refresh. Internally we used the opportunity to signal a new
direction and culture, involving all our employees in how we approach our
vision of making every customer smile.
The positive sentiment from the refresh was mirrored by good performances
from both the South African and International operations. Strong data growth
was again a major feature with Group data revenue increasing 37.6% and
active data customers increasing 43.3% to 10.9 million. This helped support
overall Group revenue growth of 8.1%.
In South Africa, we added 1.2 million customers in the quarter, coupled with
a 16.3% year on year increase in average minutes of use. This helped to
offset a reduction in our average effective price per minute of 24.8%. We
continued to drive investment in the network, adding 107 new 3G base
stations in the quarter.
I`m also pleased to say that for another successive quarter we saw an
improvement from the International operations with service revenue growing
11.0% (23.7%*) and customers increasing 21.5%.
Not everything went our way this quarter. We unfortunately experienced some
outages in our South African network. While the financial impact was
minimal, the negative impact on the customer experience was not acceptable.
We have subsequently installed more fibre capacity and upgraded certain
software to avoid future disruptions. Our number one priority over the
coming months is to ensure that our customers get the best possible network
experience."
Operating review
Group
Group service revenue increased 5.9% (7.5%*) mainly due to customer growth
of 20.4% and a 37.6% growth in data revenue offsetting the reduced mobile
interconnect revenue and lower effective prices per minute. Customers
increased 1.9 million in the quarter to 45.4 million. The active data
customers increased 43.3% to 10.9 million. Revenue grew faster than service
revenue at 8.1% (9.6%*) boosted by strong handset sales. Competition remains
intense in all our markets and we expect further pressure on pricing in the
future.
South Africa
South Africa delivered a robust performance with service revenue growing
5.0% to R11 558 million mainly due to the robust data growth. Revenue
increased 7.7% outpacing service revenue growth, largely due to a 28.0%
increase in equipment revenue.
Customers increased 19.7% to 27.7 million, adding 1.2 million in the
quarter. Prepaid customers closed at 22.4 million adding just over 1.0
million in the quarter. Contract customer growth remained strong, up 13.9%
to 5.3 million. Gross connections were up 58.9% to 3.6 million coupled with
a slight decrease in churn (excluding the change in the disconnection rule).
Vodacom had registered 96.6% of the customer base for RICA at 30 June 2011,
approximately 953 000 customers did not register and we were obliged to lock
their SIMs. As at 11 July 2011, about 205 000 of these customers had
registered and their service has since been reactivated. The SIMs locked due
to RICA will be removed from our customer base in line with our
disconnection rule.
Total ARPU was down 4.7% to R142, largely due to a 24.8% reduction in the
effective price per minute, offset by a 16.3% increase in average minutes of
use stimulated by off-peak promotional offers. Contract ARPU was down 10.2%
to R369 due to strong growth of lower end contract packages and reduced out
of bundle spend. Prepaid ARPU remained flat at R79.
Data revenue increased 35.4% to R1 856 million and active data customers
grew 37.7% to 9.6 million. We continued to increase the penetration of data
bundles into our customer base with mobile internet bundle customers1 up
86.0% to 3.0 million, adding 425 000 in the quarter due to the continued
success of BlackBerryRegistered sales, our low-end internet starter pack and
our Red is Mofaya promotion. PC connectivity devices increased by
approximately 43 000 in the quarter to 1.1 million. Active smartphones on
the network increased by more than 406 000 in the quarter to 3.7 million.
We continued to make substantial investments in the network, to enhance
quality and support the growth in data traffic, adding 107 3G base stations
in the quarter.
International
Revenue in the International operations increased by 10.2% (23.3%*) to R2
119 million. Service revenue increased by 11.0% (23.7%*) to R 2 064 million,
largely due to growth in voice traffic of 10.8% offset by a decline in the
effective price per minute of 2.3%. In local currencies, ARPU in Tanzania
and Mozambique increased year on year.
The International operations recorded customer growth of 21.5% to 17.7
million, adding 729 000 customers in the quarter.
While data revenue is only 4.4% of service revenue in the International
operations, it increased by 109.3% mainly due to strong growth in M-Pesa
active customers to 1.6 million in Tanzania, adding just over 342 000 in the
quarter.
* Growth at constant currency.
# South African operation only.
1. A unique count of customers who have made a commitment to use data,
either as part of their primary offering, or as an additional bundle.
Includes customers using the BlackBerryRegistered service.
The quarterly information has not been audited or reviewed by Vodacom`s
external auditors.
Financial review for the quarters ended
Revenue
June March June Year on Quar-
year terly
Rm 2011 2011 2010 % change % change
South Africa 13 537 13 602 12 567 7.7 (0.5)
International 2 119 2 138 1 922 10.2 (0.9)
Corporate and (87) (92) (83) (4.8) 5.4
eliminations
Revenue 15 569 15 648 14 406 8.1 (0.5)
Service revenue
June March June Year on Quar-
year terly
Rm 2011 2011 2010 % change % change
South Africa 11 558 11 863 11 012 5.0 (2.6)
International 2 064 2 081 1 859 11.0 (0.8)
Corporate and (70) (74) (69) (1.4) 5.4
eliminations
Service revenue 13 552 13 870 12 802 5.9 (2.3)
Key indicators for the quarters ended
South Africa key indicators
June March June Year on Quar-
year terly
2011 2011 2010 % change % change
Customers (thousand)1 27 731 26 535 23 161 19.7 4.5
Prepaid2 22 411 21 409 18 489 21.2 4.7
Contract 5 320 5 126 4 672 13.9 3.8
Churn (%)3 35.5 28.5 87.2
Prepaid2 41.9 33.0 105.0
Contract 8.5 9.7 9.5
Traffic (millions of 8 141 8 108 6 371 27.8 0.4
minutes)4
Outgoing 6 079 6 060 4 442 36.9 0.3
Incoming 2 062 2 048 1 929 6.9 0.7
MOU per month5 100 104 86 16.3 (3.8)
Prepaid2 81 82 59 37.3 (1.2)
Contract 181 195 205 (11.7) (7.2)
Total ARPU (Rand per 142 153 149 (4.7) (7.2)
month)6
Prepaid2 79 85 79 - (7.1)
Contract 369 387 411 (10.2) (4.7)
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 inactivity to seven months during the quarter ended 30
June 2010. Prior year 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. 3.3 million customers were deleted during the
June 2010 quarter, due to the change in the disconnection rule.
Excluding the 3.3 million deletions, total churn was 36.4% and prepaid
churn was 43.1% for the quarter ended June 2010.
4. Traffic comprises of 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 customer base during the period.
6. Total ARPU is calculated by dividing average monthly service revenue by
the average monthly total reported mobile customer base during the
period. Prepaid and contract ARPU only includes service revenue
generated from Vodacom customers.
International key indicators
June March June Year on Quar-
year terly
2011 2011 2010 % change % change
Customers (thousand)1 17 686 16 957 14 561 21.5 4.3
Tanzania 9 260 8 861 8 009 15.6 4.5
DRC 4 245 4 155 3 419 24.2 2.2
Mozambique 3 277 3 082 2 411 35.9 6.3
Lesotho 904 859 722 25.2 5.2
Churn (%)2
Tanzania 43.5 51.1 42.9
DRC 75.3 45.3 77.5
Mozambique 42.5 43.0 76.9
Lesotho 20.3 21.5 17.2
MOU per month3
Tanzania 54 53 58 (6.9) 1.9
DRC 43 38 56 (23.2) 13.2
Mozambique 34 36 29 17.2 (5.6)
Lesotho 28 32 31 (9.7) (12.5)
Total ARPU (Rand per
month)4
Tanzania 19 19 22 (13.6) -
DRC 33 34 39 (15.4) (2.9)
Mozambique 24 22 22 9.1 9.1
Lesotho 54 55 62 (12.9) (1.8)
Total ARPU (local
currency)4
Tanzania (TZS) 4 276 4 098 4 127 3.6 4.3
DRC (USD) 4.8 4.9 5.2 (7.7) (2.0)
Mozambique (MZN) 106 102 98 8.2 3.9
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, as at the end of the period indicated.
2. 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.
3. 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 customer base during the period.
4. Total ARPU is calculated by dividing average monthly service revenue by
the average monthly total reported mobile customer base during the
period.
Historical key indicators for the quarters ended
Revenue
June March De- Sep- June March De-cember
2011 2011 cember tember 2010 2010 2009
Rm 2010 2010
South 13 537 13 602 14 072 13 130 12 567 12 621 13 439
Africa
Inter- 2 119 2 138 2 056 2 080 1 922 1 893 2 066
national
Corporate (87) (92) (95) (100) (83) (79) (80)
and elimi-
nations
Revenue 15 569 15 648 16 033 15 110 14 406 14 435 15 425
Service revenue
June March De- Sep- June March De-
2011 2011 cember tember 2010 2010 cember
Rm 2010 2010 2009
South Africa 11 558 11 863 12 075 11 442 11 012 11 236 11 645
Inter- 2 064 2 081 2 001 2 016 1 859 1 822 1 997
national
Corporate (70) (74) (78) (76) (69) (67) (52)
and elimi-
nations
Service 13 552 13 870 13 998 13 382 12 802 12 991 13 590
revenue
South Africa
June March De- Sep- June March De-
2011 2011 cember tember 2010 2010 cember
2010 2010 2009
Customers 27 731 26 535 25 302 23 873 23 161 26 262 27 102
(thousand)1
Prepaid2 22 411 21 409 20 310 19 074 18 489 21 765 22 753
Contract 5 320 5 126 4 992 4 799 4 672 4 497 4 349
Churn (%)3 35.5 28.5 32.7 35.9 87.2 42.9 41.5
Prepaid2 41.9 33.0 38.3 42.5 105.0 49.6 47.5
Contract 8.5 9.7 10.3 9.6 9.5 9.1 8.8
Traffic 8 141 8 108 8 402 7 352 6 371 6 379 6 655
(millions of
minutes)4
Outgoing 6 079 6 060 6 307 5 351 4 442 4 434 4 632
Incoming 2 062 2 048 2 095 2 001 1 929 1 945 2 023
MOU per 100 104 114 105 86 80 80
month5
Prepaid2 81 82 92 79 59 53 55
Contract 181 195 202 207 205 214 220
Total ARPU 142 153 164 163 149 140 140
(Rand per
month)6
Prepaid2 79 85 93 90 79 74 76
Contract 369 387 408 411 411 436 455
International
June March De- Sep- June March De-
2011 2011 cember tember 2010 2010 cember
2010 2010 2009
Customers 17 686 16 957 16 288 15 504 14 561 13 630 13 352
(thousand)1
Tanzania 9 260 8 861 8 665 8 421 8 009 7 270 6 878
DRC 4 245 4 155 3 847 3 638 3 419 3 353 3 522
Mozambique 3 277 3 082 2 953 2 676 2 411 2 329 2 312
Lesotho 904 859 823 769 722 678 640
Churn (%)3
Tanzania 43.5 51.1 41.5 41.9 42.9 42.3 43.3
DRC 75.3 45.3 80.8 91.1 77.5 50.9 157.5
Mozambique 42.5 43.0 45.3 65.3 76.9 68.9 61.1
Lesotho 20.3 21.5 24.6 20.2 17.2 17.4 19.5
MOU per
month5
Tanzania 54 53 58 55 58 69 74
DRC 43 38 74 77 56 44 37
Mozambique 34 36 43 49 29 28 33
Lesotho 28 32 32 33 31 33 49
Total ARPU
(Rand per
month)6
Tanzania 19 19 20 21 22 25 28
DRC 33 34 32 39 39 31 35
Mozambique 24 22 23 22 22 23 27
Lesotho 54 55 62 60 62 63 73
Total ARPU
(local
currency)6
Tanzania 4 276 4 098 4 330 4 393 4 127 4 472 5 060
(TZS)
DRC (USD) 4.8 4.9 4.7 5.3 5.2 4.3 4.7
Mozambique 106 102 115 109 98 96 109
(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 year 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 customer base during the
period.
6. Total ARPU is calculated by dividing average monthly service
revenue by the average monthly total reported mobile customer
base during the period. Prepaid and contract ARPU only include
service revenue generated from Vodacom customers.
Revenue for the quarter ended 30 June 2011
South Yoy % Inter- Yoy % Cor- Group Yoy %
Africa change natio- change porate/ change
nal Elimi-
Rm nations
Mobile voice 7 028 2.8 942 7.5 (1) 7 969 3.3
Mobile 1 469 (10.4) 157 9.8 (30) 1 596 (9.6)
interconnect
Mobile 743 4.1 57 7.5 - 800 4.4
messaging
Mobile data 1 856 35.4 90 109.3 - 1 946 37.6
Other service 462 2.2 818 9.9 (39) 1 241 8.5
revenue
Service 11 558 5.0 2 064 11.0 (70) 13 552 5.9
revenue
Equipment 1 819 28.0 30 - (13) 1 836 27.1
revenue
Non-service 160 19.4 25 (24.2) (4) 181 13.8
revenue
Revenue 13 537 7.7 2 119 10.2 (87) 15 569 8.1
Average quarterly exchange rates
June March June Year on Quar-
2011 2011 2010 year terly%
% change change
USD/ZAR 6.79 7.01 7.55 (10.1) (3.1)
ZAR/MZN 4.43 4.53 4.52 (2.0) (2.2)
ZAR/TZS 226.86 214.51 188.02 20.7 5.8
EUR/ZAR 9.78 9.58 9.60 1.9 2.1
Non-GAAP information
This trading statement contains certain non-GAAP financial information. The
Group`s management believes these measures provide valuable additional
information in understanding the performance of the Group or the Group`s
businesses because they provide measures used by the Group to assess
performance. However, this additional information presented is not uniformly
defined by all companies, including those in the Group`s industry.
Accordingly, it may not be comparable with similarly titled measures and
disclosures by other companies. Additionally, although these measures are
important in the management of the business, they should not be viewed in
isolation or as replacements for or alternatives to, but rather as
complementary to, the comparable GAAP measures.
Trademarks
4U and Call Me are trademarks of Vodacom (Pty) Limited. Vodafone, the
Vodafone logo, Vodafone Mobile Broadband, Vodafone WebBox, Vodafone
Passport, Vodafone live!, Vodacom, Vodacom M-Pesa, Vodacom Millionaires,
Vodacom 4 Less and Vodacom Change the World are trademarks of Vodafone Group
Plc (or have applications pending).
The trademarks RIMRegistered, BlackBerryRegistered, are owned by Research in
Motion Limited and are registered in the US and may be pending or registered
in other countries. Microsoft, Windows Mobile and ActiveSync are either
registered trademarks or trademarks of Microsoft Corporation in the US
and/or other countries. Google, Google Maps and Android are trademarks of
Google Inc. Apple, iPhone and iPad are trademarks of Apple Inc., registered
in the US and other countries. Other product and company names mentioned
herein may be trademarks of their respective owners.
Forward-looking statements
This trading statement for Vodacom Group Limited for the quarter ended 30
June 2011 contains unaudited `forward-looking statements` with respect to
the Group`s financial condition, 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, revenues, financial conditions, 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
21 July 2011
Sponsor: UBS South Africa (Pty) Limited
Date: 21/07/2011 07:05:01 Produced by the JSE SENS Department.
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