Shameel Joosub, Vodacom Group CEO.

The Vodacom Group’s international unit has reported strong interim performance for the six months ending September.

The unit, which includes operations in the Democratic Republic of the Congo, Lesotho, Mozambique, and Tanzania, recorded a 16.6% increase in service revenue to R14.7 billion, with a 22.3% increase in users.

Today, the pan-African telco released its half-year results, with Group CEO Shameel Joosub remarking that the international unit had been positive in key metrics, due to robust increases in data revenue and M-Pesa income, which were up 34.9% and 26.8%, respectively.

M-Pesa, which is managed jointly by Vodacom Group and Safaricom, is the continent's most successful mobile money platform and has become a critical revenue stream for both carriers.

"M-Pesa revenue growth was driven by continued customer and service adoption, which is consistent with our commitment to financial inclusion," Joosub said.

“Increased smartphone usage and the acceleration of our 4G network roll-out contributed to our good data revenue performance,” he added.

"In Kenya, Safaricom delivered excellent results, and our Ethiopian greenfield roll-out is proceeding as planned. Kenya's service revenue increased by 8.5%, boosted by growth in the fixed business and a 16.5% increase in M-Pesa revenue. Furthermore, Safaricom Kenya recorded 13.0% EBITDA growth, supporting an improvement to its outlook.

"Our recently launched Ethiopian business, Safaricom Ethiopia, has made good progress since its commercial launch in October 2022, already reaching 4.1 million customers," Joosub said of the group's latest investment.

"More recently, we launched M-Pesa, which will undoubtedly play a game-changing role in increasing financial inclusion and economic growth in Africa's second most populous country."

M-Pesa has registered 1.2million members in Ethiopia since starting the mobile money service, two months ago.

Joosub continued: "At the Vodacom Group level, Safaricom contributed R1.5 billion to operating profit, with a marginal 1.1% decline. This was a positive result, given that we anticipate Safaricom Ethiopia's EBITDA losses to peak in the current fiscal year."

Joosub was also bullish about Vodacom Group's largest investment to date, Vodafone Egypt, stating he is happy with the accelerated expansion of the company's financial services portfolio, which is being driven by an ever-expanding mobile money ecosystem.

South African operations were also a bright spot during the period, with Joosub applauding Vodacom South Africa's resilience, which he said justifies substantial network investments, which allow the business to keep consumers connected throughout extended periods of loadshedding.

"These elements contributed to the 35.5% increase in Group revenue to R72.8 billion, with Vodafone Egypt providing the biggest boost to growth, given it did not form part of Vodacom Group's first half performance in the previous fiscal year," he stated.

"Revenue from new services, such as financial and digital services, fixed and IoT, contributed R11.7 billion, equivalent to 19.8% of Group service revenue, and is on track to meet our medium-term contribution target of 25-30%.

“Our R4.5 billion investment, over four and a half years, to minimise the effects of loadshedding, continues to pay off in South Africa, where we also committed to spending R60 billion over five years at the South Africa Investment Conference.”

According to Joosub, these expenditures have already resulted in enhanced network availability during extended power outages, contributing to a 4.0% increase in service revenue in the Group’s largest market.

"Despite ongoing macroeconomic challenges, associated with inflation and loadshedding, revenue growth in South Africa was supported by our consumer contract segment, excellent growth in fixed and financial services, and a resilient performance in the prepaid segment. Data traffic growth accelerated to 45.2% throughout the year, thanks to our investment in network resilience," he said.

In South Africa, new services – including financial and digital services, fixed and IoT – increased 18.1% and contributed R5.1 billion to revenue.

Financial services revenue increased 10.8% to R1.6 billion, due to solid business performance. With over 7.6 million downloads and 4.1 million registered users, the company's super-app, VodaPay, is gaining popularity, Joosub noted.