Vodacom Capex grows 10% for 4G capacity and coverage

South Africa’s Vodacom Group said capital expenditure (Capex) rose 10 percent to 14.642 billion rand in fiscal 2022 vs 13.307 billion rand in fiscal 2021.
Vodacom Tanzania networkVodacom said its investments in 4G network and coverage to enhance network lead in all markets pay dividends with data services a key driver of growth. This is evidenced by the 11 percent increase in data revenue, contributing 20.7 percent of International service revenue.

Vodacom said the coming financial year also promises to be significant in the lives of the South African consumer now that the long-awaited spectrum auction has concluded in March 2022 and is expected to contribute to the long-term sustainability of the industry in Vodacom Group’s largest market.

In addition to accelerating rural coverage program and fast-tracking the roll-out of 5G network, access to spectrum will result in faster data connectivity and will assist in delivering value for customers, who have already benefitted from a 43 percent drop in data prices since 2020 and R50 billion investment in infrastructure over the past five years.

Vodacom expects new digital and financial services to generate over a quarter of group service revenue in the medium term, Vodacom CEO Shameel Joosub said on Monday.

Vodacom, like its peer MTN Group, has been transforming its business from providing telecom services to building a technology company that enables its 129.6 million customers to also lend money, make payments, shop online and control appliances at home using smartphones.

Vodacom’s focus on services, which include digital and financial services, fixed broadband and internet of things (IoT) supported its normalised group service revenue growth of 4.6 percent to 79.9 billion rand ($4.91 billion) in the year ended March 31.

Revenue from financial services, the largest component of sales of new services, rose 14.4 percent to 7.6 billion rand — driven by adoption of Vodacom’s South African “super-app”, VodaPay – which allows users to pay for bills and shop from various online stores in the app using their smartphones – and by growth of its M-Pesa mobile money service.

VodaPay has attracted 2.2 million downloads and 1.6 million registered users.

IoT was up 32.1 percent, supported by products in agriculture and smart infrastructure. These new services amounted to 14.3 billion rand and contributed 17.9 percent to group service revenue. The group is targeting a contribution of 25 percent-30 percent.

Vodacom is finalising asset acquisitions of Vodafone Egypt from parent company Vodafone and buying fibre assets in South Africa.

Through a consortium led by Kenyan telecoms operator Safaricom, the parties including Vodacom plan to launch in Ethiopia by this year after a delay due to a conflict in northern Ethiopia that broke out in 2020. Vodacom partly owns Safaricom.

Vodacom reported an operating profit of 28.23 billion rand for the year, up from 27.65 billion rand in 2021, while earnings per share rose by 3.4 percent.