Vodacom Revenue Rises on Surge in South Africa Smartphone Sales

  • African mobile carrier selling cheaper, own-branded devices
  • Vodacom to grow further in Africa through Safaricom deal

Vodacom Group Ltd. first-quarter sales gained 3.9 percent as Africa’s largest carrier by market value invested in its network and increased sales of smartphones in its home country of South Africa.

The unit of Vodafone Group Plc reported revenue of 20.7 billion rand ($1.6 billion), propelled by a 15 percent rise in data sales. The Johannesburg-based company added 2.3 million customers in South Africa and 280,000 customers in its four other markets, bringing the total to 70 million people, it said in a statement Thursday.

Growth was “underpinned by the consistent and significant investment in our network infrastructure and IT systems,” said Chief Executive Officer Shameel Joosub. “Although the international operations have turned the corner, currency volatility is still negatively impacting translation of these results.”

Vodacom, about 70 percent owned by Newbury, England-based Vodafone, is seeking to grow in the continent in partnership with Kenya’s Safaricom Ltd., in which it agreed to buy a 35 percent stake from its parent company. The carrier is focusing on extending data services as they become more affordable, and has introduced low-cost, Vodacom-branded smartphones as network speeds improve.

The company increased its smartphone users in South Africa by more than 18 percent to 16.6 million, Vodacom said.

The shares increased 0.1 percent to 175.68 rand as of 10:04 a.m. in Johannesburg, extending the year’s gain to 15 percent. That values the company at 262 billion rand. Cross-town rival MTN Group Ltd. has declined 2.2 percent this year.

While the company saw improved growth in its international markets such as Tanzania and Mozambique, economic weakness and decoupling of the Congolese franc from the dollar still had a negative impact on sales numbers in the Democratic Republic of Congo.

Vodacom is aware of “the weaker economic conditions that prevail in South Africa as well as some of our larger markets and have put measures in place should these conditions deteriorate materially,” the company said.

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