Vodacom South Africa activated 600,000 smartphones on its network in the third quarter of 2013, the country’s dominant mobile operator disclosed on Wednesday, adding that data revenue grew 31.2% in the period as it continues to capture, retain and grow the data market.
“During the period we added 600 000 smartphones and now have 7.2m smartphones active on the network. The average monthly data usage per smartphone grew by 83.5% to 254 MB per month to further drive growth in overall data traffic supported by continued investment in our network,” says Shameel Joosub, Vodacom Group CEO.
Vodacom South Africa’s data revenue was up 31.2%, contributing 23.6% to service revenue compared to 18.1% a year ago. The company‘s total revenue grew by 6.6% to R16.5bn in the quarter boosted by a 26.9% growth in equipment revenue.
The South African unit of Britain’s Vodafone Group Plc is diversifying its revenue income into data as its mobile voice business is saturated and facing regulatory pressure.
“This quarter highlights once again that our strategy of sustained network investment is key to allow us to grow our overall business while still driving down the cost to communicate. In South Africa as an example, we have continued with our pricing transformation to drive the adoption of price plans that offer more value to customers which has reduced the prepaid average price per minute by 25.3% to 56 cents and the average effective price per MB of data by 16.2%,” says Joosub.
South Africa’s growth contributed to Vodacom Group, which reported a 10.5% increase in third-quarter revenue to R20bn.
Group active customers grew 12.3% to 56m and active data customers grew 27.9% to 23.7m.
Meanwhile Tech Financials has also reported that Vodacom intend to challenge the legal validity of the process followed by the country’s telecoms regulator to aggressively cut mobile and fixed termination rates – the fees charged by mobile and fixed phone companies to handle calls from other providers.
In the final regulation, the Independent Communications Authority of SA announced last month that the incumbent mobile cellular operators are expected to reduce their Mobile Termination Rate (MTR) from 40c today to 20c as of 1 March 2014. The MTR’s for small mobile operators like Cell C and Telkom Mobile will remain at 44c. The fixed termination rate for Telkom remains at 12c in respect of local interconnection for the coming year, while the rate for the national interconnections will fall from 19c to 16c. By March 2017, the call termination rates for the major operators will be unified at 10c, with continued, albeit falling, asymmetry for small mobile and fixed operators.
“Vodacom is supportive of an MTR glide path which should be determined in accordance with the procedures as set out in the Electronic Communications Act, which requires that the rates be cost based. Cost based rates are important to sustain our on-going investment strategy. We have concerns about the process used to determine these published rates. We intend to challenge the legal validity of the process,” says Shameel Joosub, Vodacom Group CEO.
South Africa’s biggest mobile operators – Vodacom and MTN – will have to start charging each other to carry calls between their networks 20c/minute by 1 March 2014.
This piece was lifted with permission for Tech Financials