Broadband boom for Vodacom

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Broadband is becoming big business for Vodacom. Its interim results for the six months to 30 September, released on Monday, show a surge in data revenues year-on-year of 41,1% to R2,9bn.

The contribution from SA data users accounted for R2,7bn of its total data revenue in the period.

Vodacom says it has enjoyed a boom in demand from SA users and managed to increase its data customers by 1,2m during the half-year. It now has 7,9m data users.

Coupled with an increase in data bundle purchases, Vodacom SA has increased the number of smartphone users in its base by 65%, to 2,5m. Vodacom says the increase can be attributed in part to an average 16,1% decrease in the price per megabyte of data.

Like rival MTN, the effects of the Sim card registration law may be stabilising. Vodacom was the hardest hit of the operators when the Regulation of Interception of Communications & Provision of Communication-Related Information Act (Rica) came into effect last year.

In July last year, Vodacom connected more than 1,3m Sim cards, a figure that tanked a month later to fewer than 300 000. It was a similar story at MTN SA, which lost more than 800 000 subscribers in the third quarter of 2009.

Vodacom says the situation has improved. It has registered 73,6% of its active prepaid customers. “Though prepaid customer growth was affected by almost 3,3m disconnections in the first quarter, 585 000 customers were added in the second quarter,” it says in a statement.

Rica has also had a positive effect on the business, driving up the average revenue per user (Arpu) in prepaid by 28,8%, to R85.

Vodacom has had a strong focus in converting prepaid customers to contract, and the group’s performance in the contract space was good over the half-year. It increased the number of contract subscribers by 15,4% to 4,8m, which represents about 20% of the group’s entire SA customer base.

However, Vodacom says a decrease in termination rates — what the operators charge each other to carry calls onto their networks — has hurt contract Arpu — down 9,1% to R411.