Vodacom added 2.5 million group active customers during the quarter ended 31 December 2017; 1.6 million in South Africa and 0.9 million in its international operations.

The mobile operator now has a total of 73.6 million active customers across the group, a 13% increase year-on-year.

This is according to Vodacom's newest trading statement released this morning, which shows group revenue grew 6.7% in the quarter, to R22.6 billion, and service revenue was up 5.5%, to R18.4 billion.

Data revenue is still on the rise and the group saw an increase of 9.7% to R6.6 billion, while international data revenue was up 19.5%.

South African service revenue grew 4.9% to R14.1 billion, supported by strong customer gains and data revenue growth. International service revenue increased 8.7% to R4.6 billion, showing a third consecutive quarter of accelerating growth.

SA growth patterns

Vodacom Group CEO Shameel Joosub says the group'sstrategy of sustained investment in its network and improving customer experience delivered solid gains in customer numbers in SA, and grew growth in international operations.

"In SA, our customer base grew 14.4% to 41.6 million, contributing to the 6.2% increase in revenue, underpinned by a resilient prepaid voice market and a highly successful summer campaign," he notes.

Of the 1.6 million new customers added in SA in the quarter, 1.5 million were prepaid customers. Prepaid active customer numbers were up 16.3% year-on-year.

"The increased customer base has supported prepaid customer revenue growth of 6.8%."

Contract customers increased by 81 000; however, average revenue per user for contract customers declined 5.1% to R393.

Joosub adds that during the quarter, Vodacom delivered on its promise to reduce out-of-bundle data prices, part of a commitment to reduce the cost-to-communicate. The group says it saw a 24.2% decline in effective data prices for the year.

"In order to compensate for the expected shortfall in revenue, we have undertaken a range of initiatives to stimulate usage. Monthly trends towards the end of the quarter show this is having the desired effect."

In SA, data revenue grew by 8.7% to R6 billion, contributing 42.3% of service revenue. Data customers grew by 6.4%, adding 598 000 customers in the quarter.

"Data traffic growth remains robust at 43.9%, slightly down from the previous quarter as a result of commercial steps taken to reduce free data usage, following the end of promotional offers during the quarter.

"Our bundle strategy continues to deliver growth, with in-bundle data revenue growth trends improving, supported by growth in bundle sales of 53.8%," the group says.

Vodacom continues to invest heavily in communication infrastructure in SA and during the last quarter, capital expenditure of R2.3 billion was focused on maintaining the network and enhancing IT systems and deep learning machine capabilities.

Joosub says on the regulatory front in SA, Vodacom will submit a detailed response to the Department of Telecommunications and Postal Services regarding its proposed amendments to the Electronic Communications Act (ECA).

"We remain of the opinion that a hybrid between what is currently in place and the proposed wholesale open access network addresses the government's transformation mandate and will have a greater impact on driving down the cost to communicate for customers compared with the proposed amendments to the ECA."

International business

"Driven by strong customer growth, a solid performance from M-Pesa and sustained demand for data, our international operations continue to gain momentum," Joosub says.

Data revenue grew 19.5% in the group's four international operations. This was supported by a strategy to increase smartphone penetration through improved device affordability. New services contributed to a 33.3% jump in revenue from the M-Pesa mobile money platform. Growth was further supported by an 11% increase in customers, resulting in revenue from international increasing by 9.3%.

"Growth trends in our international operations continued to improve in the quarter. Tanzania continues to deliver on its turnaround strategy with good revenue and customer growth, while we continued our efforts to improve customer registration processes. Mozambique and Lesotho have made solid progress on their strategic priorities of M-Pesa and data growth, delivering excellent momentum, while performance in the DRC has improved as the currency and economic environment starts to stabilise," the group adds.

Capital expenditure of R630 million was spent in the international operations during the quarter.

Results for Vodacom's associate investment in Safaricom in Kenya are disclosed on a bi-annual basis and are therefore not included in the quarterly update.