Slower Subscriber Growth across Vodacom’s African operations

Telecoms

Vodacom saw a dip in the pace at which new customers are joining its network in South Africa, with 958,000 signing up in the past three months against 1.5-million just before Christmas a year ago.

The cellular operator is also seeing slower growth in its other operations, adding 519,000 new users in the third quarter to December to the previous December quarter's 870,000. Its biggest slowdown came in the Congo, where its subscribers inched up just 2.9%, well short of the 15% surge enjoyed a year ago. Its networks in Tanzania and Mozambique added fewer customers than they did in the third quarter of last year, with only its tiny network in Lesotho enjoying stronger growth to reach a total of 332,000 customers.

Vodacom is now serving 33-million people, up 4,7% since September, as it connected 4.8-million new users. But that growth is offset by their constant hopping between rival networks, so overall its user base rose by just 600,000 from 31.6-million in September. In South Africa, it now serves 24.2-million users, but its rate of growth fell to 4.1% from 7,3% a year ago.

Yet it remains well ahead of MTN, which claims 14-million users in SA, meaning Vodacom has an estimated 55.6% of South African users. MTN outstrips Vodacom overall, however, with 55 million customers throughout Africa and the Middle East.

Chief financial officer Leon Crouse blamed stiff competition for slower third-quarter subscriber growth in the third quarter. But for the year so far its customers rose 33% in Tanzania and 40% in the Congo, Lesotho and Mozambique. Those markets had not slowed down materially or at all. Revenue for the nine months to December 31 hit R35.7 bn, up 17,3% on the first nine months of its previous financial year.

Its average customer in South Africa now spends R123 (US$17.01) a month, up from R118 (US$16.33) in the previous quarter. That shows Vodacom is bucking the trend for the average spending to wither as poorer customers sign up. What shored up that figure was a move to axe 2.9-million inactive users. Shedding those customers from its database led to a higher average spend for the remaining customers.

Business Day