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VODACOM GROUP LIMITED - Vodacom Group Limited quarterly update for the period ended 31 December 2014

Release Date: 04/02/2015 08:00
Code(s): VOD     PDF:  
Wrap Text
Vodacom Group Limited quarterly update for the period ended 31 December 2014

Vodacom Group Limited
(Incorporated in the Republic of South Africa)
(Registration number 1993/005461/06)
Share code VOD       ISIN ZAE000132577
JSE code VOD008      ISIN ZAG000106063
ADR code VDMCY       ISIN US92858D2009

4 February 2015
News release
Vodacom Group Limited quarterly update for the period ended 31 December 2014

Salient features
-       Group revenue decreased 1.1% (-2.2%*) to R19 993 million with service revenue down 2.7% (-3.9%*) to R15 815 million
-       Excluding the impact of the 50% cut in mobile termination rates ('MTRs') in South Africa, Group revenue increased 1.5% and
        service revenue increased 0.6%
-       Group data revenue increased 19.9% to R4 330 million, representing 27.4% of service revenue
-       Group active customers increased 9.1% to 61.1 million and active data customers grew 16.4% to 26.5 million
-       International operations' service revenue increased 7.6% (1.9%*) to R3 975 million representing 25.1% of Group service revenue
-       Strong progress on accelerated capital expenditure programme with 15.0% of Group revenue spent for the quarter to speed up
        LTE rollout and to expand 3G coverage

                                                                  Quarter ended                     Year on year % change                Quarter on quarter1 % change
Rm                                                                December 2014                     Reported       Normalised*           Reported      Normalised*
Revenue                                                                  19 993                         (1.1)            (2.2)                3.8             3.3
  South Africa                                                           15 987                         (3.1)            (3.1)                3.9             3.9
  International                                                           4 092                          6.6              0.8                 2.7             0.5
Service revenue                                                          15 815                         (2.7)            (3.9)               (0.1)           (0.6)
  South Africa                                                           11 856                         (5.8)            (5.8)               (1.2)           (1.2)
  International                                                           3 975                          7.6              1.9                 2.6            (0.5)

Shameel Joosub, Vodacom Group CEO commented:
We added 5.1 million customers in comparison to last year, taking our total customer base to 61.1 million. Despite this increase in
customers, it's still been a challenging quarter with Group revenue down 1.1%. There was a significant impact from the 50% decline in
mobile termination rates in South Africa, increased competition and we're seeing increased pressure on consumer spending. Revenue
in South Africa declined 3.1%; excluding the impact from MTRs revenue would have remained flat. The international operations
posted a 6.6% increase in revenue.

Data was once again a key highlight, with active data customers up 16.4% to 26.5 million and data traffic growing 62.2% in South
Africa and an almost threefold increase in the international operations. Data now makes up 27.4% of service revenue.

To support this boom in data demand as well as increase our coverage footprint, we continued with our accelerated capital
expenditure programme. In South Africa, Vodacom's LTE service now covers 34% of the population through 2 194 sites, while 3G
population coverage is 94% through 8 407 sites. In our international operations, we've increased the number of 3G sites by 52.7% in
comparison to last year, and the number of 2G sites is up 27.2%.

Despite difficult trading conditions, we are continuing to invest in our networks and business, because we believe it supports our
network quality and growth aspirations which will deliver positive returns for our shareholders.

We're continuing to work through the approvals process for the acquisition of Neotel. South Africa's fixed broadband penetration level
is 1/10th of that seen in developed economies, which impacts our competitiveness as a nation. If the transaction goes through, our
ambition is to add at least one million fibre connections to homes and businesses to address this shortfall. By boosting investment in
Neotel, we're convinced we can play a major part in helping Government reach its 2020 and 2030 broadband targets.

* Represents normalised growth at a constant currency (using current period as base). Refer below for a reconciliation of normalised growth.
1. Quarter on quarter represents Q3'15 performance against Q2'15
All growth rates refer to the quarter compared to prior year same quarter unless stated otherwise.

Operating review
South Africa

Revenue declined 3.1% to 15 987 million (up 3.9% on Q2 2015) with 8.9% growth in equipment revenue from increased handset sales
offset by a decline in service revenue. Growth in Q2 was positively impacted by a once-off R325 million# accounting estimate change;
excluding this impact revenue grew 6.2% over Q2 2015.

Service revenue declined 5.8% (up 1.6%# on Q2 2015) due to the 50% cut in MTRs in April 2014 and by increased competition and
weaker consumer spending. Excluding the impact of MTRs service revenue declined 1.7%.

Our strategy to transform pricing through integrated packages for contract customers and low cost bundles for the prepaid segment
is well advanced. We reduced our blended price per minute by 21.3% to 63 cents (Q3 2014:80 cents) and grew outgoing voice traffic
by 10.1%.

We have migrated 74.2% of our contract customers to integrated plans. 45.6% of Top Up customers have switched to our uChoose
packages which give customers access to integrated plans with the option to access prepaid promotions on an ad hoc basis. 68.9% of
contract revenue is in bundle with a slight ARPU decline of 1.8%. Excluding interconnect, ARPU increased 1.1%. Notably, Contract
ARPU has stabilised quarter on quarter and we have reduced contract churn to its lowest levels ever at 7.8%. Active contract
customers increased 1.2% to 4.9 million (excluding machine to machine (M2M)) to grow mobile contract customer revenue 1.5% to
R5 418 million after four successive quarters of declines.

The number of prepaid customers using bundles grew 18.8% to 6.2 million and we sold over 50 million prepaid bundles per month in
the quarter. Active prepaid customers increased 1.4% year on year to 26.5 million. We took actions to decrease flow of starter packs to
the market to reduce rotation of sim cards. This reduced our number of gross connections resulting in a reduction of our prepaid base
of 1.3 million customers in the quarter. Mobile prepaid customer revenue declined 7.6% to R5 032 million due to 16.3% decline in
ARPU driven by increasing macroeconomic challenges; however we achieved flat ARPU quarter on quarter.

We delivered encouraging growth in new business segments. Business managed services revenue grew 27.4% and active M2M
connections increased 17.1% to 1.6 million. We continue to utilise the Vodafone Global Enterprise network and the Vodafone global
M2M platform to increase the scale to our enterprise services.

Data revenue grew 18.8% to R3 526 million, against exceptionally strong data growth in Q3 last year, to make up 29.7%
(Q3 2014: 23.6%) of service revenue. Data traffic increased 62.2% and active data customers (excluding M2M) increased to 16.8
million or 53.4% of our active customers. Although our effective price per MB reduced by 26.5%, we maintained stable pricing quarter
on quarter. We also drove data adoption by increasing the number of data capable devices on our network through our handset
financing programme and through strong sales of our low cost devices. The number of active smartphones and tablets on our network
grew 23.6% to 9.5 million devices. Average monthly data usage was up 41.1% to 358 MB on smartphones.

The relaunch of m-pesa in August 2014 is progressing well. We currently have approximately 700k registered users. Our priority is to
continue increasing awareness and to widen the m-pesa ecosystem.

We maintained our tight cost management to mitigate the impact of the steep MTR reductions. We have achieved further
improvements in our opex and direct expenses.

We are progressing well with our accelerated capital investment programme. We more than doubled the number of LTE sites to 2 194
and increased 3G sites by 22.4% to 8 407. Our LTE network now covers 34% of the population and our 3G network covers 94% of the
population. 77.8% of our sites are now connected to our self-provided high capacity transmission network. We also launched our fibre
to the business (FTTB) on a limited basis in September 2014.

We still await ICASA and Competition Commission approvals to complete the Neotel acquisition.


# In Q2 2015 we changed our accounting estimate relating to revenue recognition of un-recharged vouchers resulting in a once off positive adjustment of R325 million in
 South Africa in that quarter.


International

International service revenue grew 7.6% (1.9%*) to R3 975 million to now contribute 25.1% (Q3 2014: 22.7%) of Group service
revenue. Our International customer base increased 18.6% to 29.7 million and outgoing voice traffic grew 49.8%. The slower growth in
service revenue reflects the on-going price competition and regulatory pressures in our key markets. Tanzania experienced severe
pricing pressures since Q3 last year, but during the course of this year pricing repair has led to more stable pricing. Growth in the DRC
reduced due to slower than anticipated network rollout and competitive pressures. Mozambique and Lesotho continue to grow
strongly.

Data revenue grew 24.8% to R804 million. Excluding m-pesa, mobile data revenue grew 22.1% supported by a 30.7% growth in active
data customers to 9.7 million and an almost threefold increase in data traffic.

M-pesa revenue grew 28.2% contributing 9.4% of service revenue. M-pesa customers increased 29.7% to 7.6 million1 reflecting strong
uptake in all our markets. We continue to expand the ecosystem to drive up the volume and value of m-pesa transactions. In Tanzania,
we now have more than 1.3 million customers using our m-pawa savings and loans service resulting in a 7% uplift in m-pesa ARPU
after launch in September 2014.

Our continued investment in network capacity and coverage remains on track. We increased the number of 3G sites by 52.7% to
further support the strong growth of mobile data and we increased the number of 2G sites by 27.2% to extend our voice coverage.



The quarterly information has not been audited or reviewed by Vodacom's external auditors.


1. Number of unique customers who have generated revenue related to any m-pesa activities in relation to m-pesa revenue during the last three months. Of these, 5.5 million
   (Q3 2014: 4.4 million) have been active in the past 30 days.


Financial review

Revenue for the quarter ended
                                                        December             September          December                Year on year % change                      Quarterly % change
Rm                                                          2014                  2014              2013               Reported           Normalised*           Reported     Normalised*
South Africa                                              15 987                15 380            16 502                   (3.1)                (3.1)                3.9            3.9
International                                              4 092                 3 984             3 838                    6.6                  0.8                 2.7            0.5
Corporate and eliminations                                   (86)                 (105)             (121)                 (28.9)               (28.9)              (18.1)         (18.1)
Revenue                                                   19 993                19 259            20 219                   (1.1)                (2.2)                3.8            3.3

Service revenue for the quarter ended
                                                        December             September          December                Year on year % change                      Quarterly % change
Rm                                                          2014                  2014              2013               Reported           Normalised*           Reported     Normalised*
South Africa                                              11 856                11 995            12 587                   (5.8)                (5.8)               (1.2)          (1.2)
International                                              3 975                 3 873             3 695                    7.6                  1.9                 2.6           (0.5)
Corporate and eliminations                                   (16)                  (40)              (34)                 (52.9)               (52.9)              (60.0)         (60.0)
Service revenue                                           15 815                15 828            16 248                   (2.7)                (3.9)               (0.1)          (0.6)

Revenue for the quarter ended 31 December 2014

                                                    South Africa                 Yoy %     International                  Yoy %           Corporate/               Group          Yoy %
    Rm                                                                          Change                                   change         Eliminations                             change
    Mobile contract revenue                                5 418                   1.5               242                    6.6                   (1)              5 659            1.8
         In bundle                                         3 731                   8.4                61                   (4.7)                   -               3 792            8.2
         Out of bundle                                     1 687                 (10.9)              181                   11.0                   (1)              1 867           (9.1)
    Mobile prepaid revenue                                 5 032                  (7.6)            2 918                    9.9                   (1)              7 949           (1.8)
         In bundle                                           766                  46.5               460                  102.6                    -               1 226           63.5
         Out of bundle                                     4 266                 (13.3)            2 458                    1.3                   (1)              6 723           (8.5)
    Mobile customer revenue                               10 450                  (3.1)            3 160                    9.7                   (2)             13 608           (0.4)
    Mobile interconnect                                      546                 (45.3)              387                  (10.4)                 (10)                923          (34.8)
    Other service revenue                                    860                   6.4               428                   12.0                   (4)              1 284            9.4
    Service revenue                                       11 856                  (5.8)            3 975                    7.6                  (16)             15 815           (2.7)
    Equipment revenue                                      3 879                   8.9                78                   11.4                  (18)              3 939            9.2
    Non-service revenue                                      252                 (28.6)               39                  (46.6)                 (52)                239          (34.5)
    Revenue                                               15 987                  (3.1)            4 092                    6.6                  (86)             19 993           (1.1)


    Of which mobile voice                                  6 420                 (12.0)            2 224                    8.3                   (1)              8 643           (7.5)
    Of which mobile messaging                                652                   0.3               136                  (28.0)                   -                 788           (6.1)
    Of which mobile data                                   3 526                  18.8               804                   24.8                    -               4 330           19.9

Notes:

-     Mobile in-bundle revenue: Represents revenue from bundles that include a specified number of minutes, messages or megabytes of data that can be used for no
      additional charge, with some expectation of recurrence.
-     Mobile in-bundle revenue - Contract: Revenue from all bundles and add-ons lasting 30 days or more.
-     Mobile in-bundle revenue - Prepay: Revenue from bundles lasting seven days or more.
-     Out-of-bundle: Revenue from minutes, messages or megabytes of data which are in excess of the amount included in customer bundles.



* Represents normalised growth at a constant currency (using current period as base). Refer below for a reconciliation of normalised growth.


Revenue for the quarter ended 31 December 2013

                                                    South Africa                 Yoy %     International                  Yoy %           Corporate/               Group          Yoy %
    Rm                                                                          Change                                   change         Eliminations                             change
    Mobile contract revenue                                5 336                  (0.1)              227                   37.6                   (2)              5 561            1.1
         In bundle                                         3 443                   2.7                64                   36.2                   (1)              3 506            3.2
         Out of bundle                                     1 893                  (4.8)              163                   38.1                   (1)              2 055           (2.4)
    Mobile prepaid revenue                                 5 444                   6.8             2 654                   32.9                   (1)              8 097           14.1
         In bundle                                           523                  98.1               227                   >200                    -                 750          151.6
         Out of bundle                                     4 921                   1.8             2 427                   23.6                   (1)              7 347            8.1
    Mobile customer revenue                               10 780                   3.3             2 881                   33.3                   (3)             13 658            8.4
    Mobile interconnect                                      999                 (24.1)              432                   38.5                  (15)              1 416          (12.7)
    Other service revenue                                    808                   7.6               382                   22.0                  (16)              1 174           11.2
    Service revenue                                       12 587                   0.6             3 695                   32.6                  (34)             16 248            6.4
    Equipment revenue                                      3 562                  26.9                70                   70.7                  (26)              3 606           27.0
    Non-service revenue                                      353                  68.1                73                  (64.1)                 (61)                365           58.9
    Revenue                                               16 502                   6.6             3 838                   33.5                 (121)             20 219           10.5


    Of which mobile voice                                  7 296                  (3.7)            2 053                   18.1                   (6)              9 343            0.4
    Of which mobile messaging                                650                 (16.3)              189                   54.9                    -                 839           (6.7)
    Of which mobile data                                   2 967                  31.2               644                  110.5                    -               3 611           40.7

Notes:

-     Mobile in-bundle revenue: Represents revenue from bundles that include a specified number of minutes, messages or megabytes of data that can be used for no
      additional charge, with some expectation of recurrence.
-     Mobile in-bundle revenue - Contract: Revenue from all bundles and add-ons lasting 30 days or more.
-     Mobile in-bundle revenue - Prepay: Revenue from bundles lasting seven days or more.
-     Out-of-bundle: Revenue from minutes, messages or megabytes of data which are in excess of the amount included in customer bundles.




Key indicators
South Africa
                                                                        December            September            December        Year on year            Quarterly
                                                                            2014                 2014                2013            % change             % change
Active customers (thousand)1                                              31 379               32 613              30 964                 1.3                 (3.8)
Prepaid                                                                   26 479               27 806              26 123                 1.4                 (4.8)
Contract                                                                   4 900                4 807               4 841                 1.2                  1.9
Active data customers (thousand)2                                         16 751               16 679              15 314                 9.4                  0.4
Machine to machine customers (thousand)                                    1 613                1 578               1 378                17.1                  2.2
Churn (%)3
                                                                            70.9                 63.7                52.3
Prepaid                                                                     79.8                 71.0                58.4
Contract                                                                     7.8                  9.9                11.4
Traffic (millions of minutes)4                                            12 402               12 182              11 298                 9.8                  1.8
Outgoing                                                                   9 827                9 570               8 928                10.1                  2.7
Incoming                                                                   2 575                2 612               2 370                 8.6                 (1.4)
MOU per month5
                                                                             130                  124                 124                 4.8                  4.8
Prepaid                                                                      120                  113                 113                 6.2                  6.2
Contract                                                                     188                  190                 183                 2.7                 (1.1)
Total ARPU (rand per month)6
                                                                             116                  115                 129               (10.1)                 0.9
Prepaid                                                                       67                   67                  80               (16.3)                   -
Contract                                                                     386                  389                 393                (1.8)                (0.8)

Notes:

1.       Active customers are based on the total number of mobile customers using any service during the last three months. This includes customers paying a monthly
         fee that entitles them to use the service even if they do not actually use the service and those customers who are active whilst roaming.
2.       Active data customers are a number of unique users who have generated revenue related to any data activities in the reported month (this excludes SMS and
         MMS messaging users). A unique user is a customer who needs to be counted once regardless of what data services they have utilised. A user is defined as a
         count of all active customers that have generated data revenue for a contractual monthly fee for this service or have used the service during the reported
         month.
3.       Churn is calculated by dividing the annualised number of disconnections during the period by the average monthly customers during the period.
4.       Traffic comprises total traffic registered on Vodacom's mobile network, including bundled minutes, promotional minutes and outgoing international roaming
         calls, but excluding national roaming calls, incoming international roaming calls and calls to free services.
5.       Minutes of use ('MOU') per month is calculated by dividing the average monthly minutes (traffic) during the period by the average monthly active customers
         during the period.
6.       Total ARPU is calculated by dividing the average monthly service revenue by the average monthly active customers during the period. Prepaid and contract
         ARPU only include service revenue generated from Vodacom mobile customers.


International
                                                                        December            September             December         Year on year             Quarterly
                                                                            2014                 2014                 2013             % change              % change
Active customers (thousand)1                                              29 676               28 367               25 019                 18.6                   4.6
Tanzania                                                                  11 810               11 316               10 289                 14.8                   4.4
DRC                                                                       11 493               11 003                9 334                 23.1                   4.5
Mozambique                                                                 5 049                4 913                4 120                 22.5                   2.8
Lesotho                                                                    1 324                1 135                1 276                  3.8                  16.7

Active data customers (thousand)2                                          9 749                9 188                7 457                 30.7                   6.1
Tanzania                                                                   5 160                4 963                3 554                 45.2                   4.0
DRC                                                                        2 324                2 241                2 280                  1.9                   3.7
Mozambique                                                                 1 817                1 636                1 285                 41.4                  11.1
Lesotho                                                                      448                  348                  338                 32.5                  28.7

Churn (%)3
Tanzania                                                                    47.1                 42.4                 46.6
DRC                                                                         92.3                 95.1                 88.6
Mozambique                                                                  93.5                 86.8                 74.3
Lesotho                                                                     44.0                125.5                 34.1

MOU per month4
Tanzania                                                                     154                  165                  131                 17.6                  (6.7)
DRC                                                                           45                   47                   33                 36.4                  (4.3)
Mozambique                                                                   111                  124                  104                  6.7                 (10.5)
Lesotho                                                                       69                   58                   51                 35.3                  19.0

Total ARPU (rand per month)5
Tanzania                                                                      43                   45                   49                (12.2)                 (4.4)
DRC                                                                           30                   33                   34                (11.8)                 (9.1)
Mozambique                                                                    55                   52                   61                 (9.8)                  5.8
Lesotho                                                                       58                   50                   51                 13.7                  16.0

Total ARPU (local currency per month)5
Tanzania (TZS)                                                             6 593                6 978                7 700                (14.4)                 (5.5)
DRC (USD)                                                                    2.7                  3.1                  3.4                (20.6)                (12.9)
Mozambique (MZN)                                                             156                  147                  178                (12.4)                  6.1

Notes:

1.       Active customers are based on the total number of mobile customers using any service during the last three months. This includes customers paying a monthly
         fee that entitles them to use the service even if they do not actually use the service and those customers who are active whilst roaming.
2.       Active data customers are a number of unique users who have generated revenue related to any data activities in the reported month (this excludes SMS and
         MMS messaging users). A unique user is a customer who needs to be counted once regardless of what data services they have utilised. A user is defined as a
         count of all active customers that have generated data revenue for a contractual monthly fee for this service or have used the service during the reported
         month.
3.       Churn is calculated by dividing the annualised number of disconnections during the period by the average monthly customers during the period.
4.       Minutes of use ('MOU') per month is calculated by dividing the average monthly minutes (traffic) during the period by the average monthly active customers
         during the period.
5.       Total ARPU is calculated by dividing the average monthly service revenue by the average monthly active customers during the period. ARPU has been restated
         to only include service revenue generated from Vodacom mobile customers.





Historical financial review

Revenue
                                     December    September      June    March   December    September       June
 Rm                                      2014         2014      2014     2014       2013         2013       2013
 South Africa                          15 987       15 380    14 791   15 170     16 502       15 585     14 549
 International                          4 092        3 984     3 591    3 798      3 838        3 655      3 065
 Corporate and eliminations               (86)        (105)      (95)    (164)      (121)         (88)       (78)
 Revenue                               19 993       19 259    18 287   18 804     20 219       19 152     17 536


Service revenue
                                     December    September      June    March   December    September       June
 Rm                                      2014         2014      2014     2014       2013         2013       2013
 South Africa                          11 856       11 995    11 442   11 982     12 587       12 069     11 678
 International                          3 975        3 873     3 493    3 684      3 695        3 538      2 978
 Corporate and eliminations               (16)         (40)      (38)     (80)       (34)         (30)       (20)
 Service revenue                       15 815       15 828    14 897   15 586     16 248       15 577     14 636


Historical key indicators

South Africa
                                                   December        September             June           March         December        September             June
                                                       2014             2014             2014            2014             2013             2013             2013
 Active customers (thousand)1                        31 379           32 613           32 516          31 520           30 964           30 139           29 282
 Prepaid                                             26 479           27 806           27 723          26 726           26 123           25 331           24 488
 Contract                                             4 900            4 807            4 793           4 794            4 841            4 808            4 794
 Active data customers (thousand)2                   16 751           16 679           16 996          15 172           15 314           14 204              n/a
 Machine to machine customers (thousand)              1 613            1 578            1 512           1 443            1 378            1 302            1 239

 Churn (%)2                                            70.9             63.7             51.9            49.0             52.3             58.4             55.5
 Prepaid                                               79.8             71.0             57.5            54.4             58.4             65.3             62.1
 Contract                                               7.8              9.9             10.4            11.8             11.4             12.6             11.6

 Traffic (millions of minutes)3                      12 402           12 182           11 776          11 453           11 298           11 034            9 752
 Outgoing                                             9 827            9 570            9 392           9 193            8 928            8 681            7 448
 Incoming                                             2 575            2 612            2 384           2 260            2 370            2 353            2 304

 MOU per month4                                         130              124              122             122              124              124              112
 Prepaid                                                120              113              112             112              113              112               98
 Contract                                               188              190              181             179              183              183              183

 Total ARPU (rand per month)5                           116              115              110             119              129              127              125
 Prepaid                                                 67               67               64              71               80               75               74
 Contract                                               386              389              372             379              393              398              387


International
                                                   December        September             June           March         December        September             June
                                                       2014             2014             2014            2014             2013             2013             2013
 Active customers (thousand)1                        29 676           28 367           27 086          25 969           25 019           23 672           22 259
 Tanzania                                            11 810           11 316           10 638          10 284           10 289           10 023            9 666
 DRC                                                 11 493           11 003           10 502          10 008            9 334            8 790            8 129
 Mozambique                                           5 049            4 913            4 604           4 333            4 120            3 688            3 310
 Lesotho                                              1 324            1 135            1 342           1 344            1 276            1 171            1 154

 Active data customers (thousand)2                    9 749            9 188            8 311           7 675            7 457            6 065            4 903
 Tanzania                                             5 160            4 963            4 480           3 788            3 554            2 958            2 343
 DRC                                                  2 324            2 241            2 016           2 218            2 280            1 748            1 421
 Mozambique                                           1 817            1 636            1 474           1 368            1 285            1 090              922
 Lesotho                                                448              348              341             301              338              269              217

 Churn (%)3
 Tanzania                                              47.1             42.4             47.3            49.9             46.6             51.5             56.8
 DRC                                                   92.3             95.1             74.8            76.6             88.6             88.8             87.7
 Mozambique                                            93.5             86.8             91.2            87.2             74.3             71.4             69.8
 Lesotho                                               44.0            125.5             41.9            50.9             34.1             39.5             43.7

 MOU per month 4
 Tanzania                                               154              165              158             131              131              122              116
 DRC                                                     45               47               39              31               33               36               39
 Mozambique                                             111              124              131             118              104               95               92
 Lesotho                                                 69               58               48              49               51               35               26

 Total ARPU (rand per month)5
 Tanzania                                                43               45               42              43               49               48               41
 DRC                                                     30               33               31              35               34               37               33
 Mozambique                                              55               52               49              52               61               61               57
 Lesotho                                                 58               50               43              41               51               47               44

 Total ARPU (local currency per
 month)5
 Tanzania (TZS)                                       6 593            6 978            6 655           6 377            7 700            7 801            6 992
 DRC (USD)                                              2.7              3.1              3.0             3.2              3.4              3.7              3.5
 Mozambique (MZN)                                       156              147              146             150              178              184              182

Notes:

1.     Active customers are based on the total number of mobile customers using any service during the last three months. This includes customers paying a monthly
       fee that entitles them to use the service even if they do not actually use the service and those customers who are active whilst roaming.
2.     Active data customers are a number of unique users who have generated revenue related to any data activities in the reported month (this excludes SMS and
       MMS messaging users). A unique user is a customer who needs to be counted once regardless of what data services they have utilised. A user is defined as a
       count of all active customers that have generated data revenue for a contractual monthly fee for this service or have used the service during the reported
       month.
3.     Churn is calculated by dividing the annualised number of disconnections during the period by the average monthly customers during the period.
4.     Minutes of use ('MOU') per month is calculated by dividing the average monthly minutes (traffic) during the period by the average monthly active customers
       during the period.
5.     Total ARPU is calculated by dividing the average monthly service revenue by the average monthly active customers during the period. Prepaid and contract
       ARPU only include service revenue generated from Vodacom mobile customers.


Reconciliation of normalised growth

The reconciliation represents normalised growth at a constant currency (using current period as base) from on-going operations. The
presentation of the pro-forma constant currency information from on-going operations is the responsibility of the directors of
Vodacom Group Limited. The purpose to presenting this information is to assist the user in understanding the underlying growth
trends in these segments. It has been prepared for illustrative purposes only and may not fairly present the financial position, changes
in equity, and results of operations or cash flows of Vodacom Group Limited. This information has not been reviewed and reported on
by the Group's auditors.

Year on year reconciliation
                                                                                Translation foreign
                                                           Reported1                       exchange2                      Normalised
                                                           % change                             ppt                         % change

                                                              14/15                                                            14/15
Revenue
Group                                                          (1.1)                           (1.1)                            (2.2)
International                                                   6.6                            (5.8)                             0.8

Service revenue
Group                                                          (2.7)                           (1.2)                            (3.9)
International                                                   7.6                            (5.7)                             1.9

Notes:

1.   The reported percentage change relates to the quarter to date year on year percentage growth between 31 December 2013 and 31 December 2014. The Group's
     presentation currency is the South African rand. Our International operations include functional currencies in United States dollar, Tanzanian shilling and
     Mozambican metical. The prevailing exchange rates for the current and comparative periods are disclosed on below.
2.   Translation foreign exchange arises from the translation of the results, at average rates, of subsidiaries' functional currencies to Vodacom's presentation currency,
     being rand. The exchange variances are eliminated by applying the quarter 31 December 2014 average rate (which is derived by dividing the individual subsidiary's
     translated rand value with the functional currency for the quarter) to 31 December 2013 quarter numbers, thereby giving a user a view of the performance which
     excludes exchange rate variances. The prevailing exchange rates for the current and comparative quarters are disclosed below.


Quarter on quarter reconciliation
                                                                                Translation foreign
                                                           Reported1                       exchange2                      Normalised
                                                           % change                             ppt                         % change

                                                              14/15                                                            14/15
Revenue
Group                                                           3.8                            (0.5)                             3.3
International                                                   2.7                            (2.2)                             0.5

Service revenue
Group                                                          (0.1)                           (0.5)                            (0.6)
International                                                   2.6                            (2.1)                             0.5

Notes:

1.   The reported percentage change relates to the quarter to date quarter on quarter percentage growth between 30 September 2014 and 31 December 2014. The
     Group's presentation currency is the South African rand. Our International operations include functional currencies in United States dollar, Tanzanian shilling and
     Mozambican metical. The prevailing exchange rates for the current and comparative periods are disclosed below.
2.   Translation foreign exchange arises from the translation of the results, at average rates, of subsidiaries' functional currencies to Vodacom's presentation currency,
     being rand. The exchange variances are eliminated by applying the quarter 31 December 2014 average rate (which is derived by dividing the individual subsidiary's
     translated rand value with the functional currency for the quarter) to 30 September 2014 numbers, thereby giving a user a view of the performance which
     excludes exchange variances. The prevailing exchange rates for the current and comparative quarters are disclosed below.





Average quarterly exchange rates

                                                               December          September           December      Year on year          Quarterly
                                                                   2014               2014               2013          % change           % change
USD/ZAR                                                           11.22              10.77              10.17              10.3                4.2
ZAR/MZN                                                            2.84               2.86               2.94              (3.4)              (0.7)
ZAR/TZS                                                          152.79             154.64             158.06              (3.3)              (1.2)
EUR/ZAR                                                           14.01              14.26              13.84               1.2               (1.8)

The quarterly information has not been audited or reviewed by Vodacom's external auditors.

Trademarks

Vodafone, the Vodafone logo, Vodacom, Vodacom m-pesa and Vodacom m-pawa, are trademarks of Vodafone Group Plc (or have
applications pending). Other product and company names mentioned herein may be trademarks of their respective owners.

Forward-looking statements

This quarterly update which sets out the quarterly results for Vodacom Group Limited for the period ended 31 December 2014
contains 'forward-looking statements', which have not been reviewed or reported on by the Group's auditors, with respect to the
Group's financial condition, results of operations and businesses and certain of the Group's plans and objectives. In particular, such
forward-looking statements include statements relating to: the Group's future performance; future capital expenditures, acquisitions,
divestitures, expenses, revenues, financial conditions, dividend policy, and future prospects; business and management strategies
relating to the expansion and growth of the Group; the effects of regulation of the Group's businesses by governments in the countries
in which it operates; the Group's expectations as to the launch and roll out dates for products, services or technologies; expectations
regarding the operating environment and market conditions; growth in customers and usage; and the rate of dividend growth by the
Group.

Forward-looking statements are sometimes, but not always, identified by their use of a date in the future or such words as 'will',
'anticipates', 'aims', 'could', 'may', 'should', 'expects', 'believes', 'intends', 'plans' or 'targets'. By their nature, forward-looking statements
are inherently predictive, speculative and involve risk and uncertainty because they relate to events and depend on circumstances
that will occur in the future, involve known and unknown risks, uncertainties and other facts or factors which may cause the actual
results, performance or achievements of the Group, or its industry to be materially different from any results, performance or
achievement expressed or implied by such forward-looking statements. Forward-looking statements are not guarantees of future
performance and are based on assumptions regarding the Group's present and future business strategies and the environments in
which it operates now and in the future.


Sponsor:                      UBS South Africa (Pty) Limited
Debt sponsor:                 Absa Bank Limited (acting through its Corporate and Investment Banking division)
ADR depository bank:          Deutsche Bank Trust Company Americas

Date: 04/02/2015 08:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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