Vodacom Sales Gain as Network Spend Attracts More Customers

  • Third-quarter revenue increased 8.7%; customer numbers 6.8%
  • Vodafone unit is disconnecting customers in Congo, Mozambique

Vodacom Group Ltd., the mobile operator with the most subscribers in South Africa, said third-quarter revenue gained 8.7 percent as the company added customers and invested in its high-speed network.

Sales were 21.7 billion rand ($1.3 billion) in the three months through December, the Johannesburg-based company said in a statement on Wednesday. Active subscriber numbers increased 6.8 percent to 65.2 million.

“Our performance in the quarter reflects the positive impact from our substantial network investment of 9.5 billion rand across all our operations in the nine months,” Chief Executive Officer Shameel Joosub said in the statement. “We have expanded our network coverage and increased data speeds.”

Vodacom, which is 65 percent owned by Newbury, England-based Vodafone Group Plc, has been expanding its Internet offering to offset falling voice revenue amid tougher competition in its domestic market. The wireless operator agreed to buy most of Neotel Pty Ltd.’s assets related to its fixed-line business late last year after 18 months of regulatory scrutiny.

The shares gained 3 percent to 148.38 rand as of 9:49 a.m. in Johannesburg, valuing the company at 220 billion rand. That reduced the year’s decline to 2.9 percent. Cross-town competitor MTN Group Ltd., which is fighting a $3.9 billion fine in Nigeria for missing a deadline to disconnect customers, is down 5.5 percent in 2016.

Vodacom sees revenue growth slowing in the three months through March as a drought and the weaker rand contribute to “a weaker outlook for the consumer in South Africa.”

South African revenue rose 7.1 percent in the quarter, compared with 16 percent in international markets, which include the Democratic Republic of Congo and Mozambique. The company has been disconnecting unregistered customers in both those countries to comply with government orders, Vodacom said.

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