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Network investment, data user experience focus pays off for Vodacom Tanzania

Network investment, data user experience focus pays off for Vodacom Tanzania

Vodacom Tanzania's outgoing Managing Director Ian Ferrao is confident the telco will continue on a growth path following the presentation of preliminary consolidated results for the year ended 31 March 2018 yesterday.

Ferrao is leaving the company in two weeks after three years at the helm.

He said the actions taken by the telco over the past financial year to improve compliance with customer registration requirements in Tanzania are likely to result in subdued customer base growth over the short-term, but growth in the long-term.

"Encouraging trends seen from the adoption of personalised offers - such as those provided through our 'Just for You' platform - are expected to build customer loyalty within our registered customer base. In addition, we will continue to focus on cost optimisation to offset impacts from the downward shift and steepening of the mobile termination rates glide path effected by the TCRA in January 2018. With the above in mind, we target mid-single digit service revenue growth, with broadly stable capital intensity in the financial year ahead."

Vodacom Tanzania reported a 5.9% growth in service revenue during the last financial year which marks an upward shift in the growth trend seen over the past three years.

The company exceeded the projected net profit for the year shown as shown in its IPO prospectus, growing earnings per share by 196% to 83.81 shillings per share, which included gain from the sale of Vodacom Tanzania's equity stake in Helios Towers Tanzania in October last year.

"The upward shift in service revenue growth and underlying improvement in profitability is underpinned by our success in delivering a superior data user experience and an ever evolving mobile money ecosystem to our customers. Good execution of network investments, customer value management, promotional offers, and targeted M-Pesa and data propositions, all contributed to the year's solid performance and earnings per share of TZS83.81," said Ferrao.

The network investments he referred to include TZS159.7 billion for the launch of 4G services in five new cities, namely, Arusha, Dodoma, Morogoro, Moshi and Tanga.

"Our active data customers continued to enjoy the fastest average download speeds available in Tanzania, largely as a result of sustained network densification, capacity upgrades and expanding our high speed 4G services. Looking ahead, we will seek to obtain the optimal amount of the spectrum available from the upcoming 700 MHz auction. Should we be successful, we expect to provide the benefits of a superior 4G data user experience to a greater number of communities across Tanzania," Ferrao added.

Further spending went toward Vodacom Tanzania's M-Pesa customer base which helped to escalate revenue growth from mobile money to 16.7%, according to Ferrao.

"Our network of over 6 300 active "Lipa kwa M-Pesa" merchants makes M-Pesa the most convenient payment choice, outgrowing the number of payment card terminals across the country. Of the US$17.5 billion of payments made across the M-Pesa system as a whole, the equivalent of over US$160 million was transacted through our new merchant platform which we established during the year."

Incoming Vodacom Tanzania MD, Sylvia Mulinge (currently director for consumer business at Safaricom) will participate in the launch of the Safaricom Foundation's strategy for 2018 to 2021 in Nairobi on Thursday.

Safaricom and Vodacom Tanzania are majority owned by Vodacom Group Limited, a company registered in South Africa, which in turn is majority owned by UK-based Vodafone Group Plc.

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