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
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