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VODACOM GROUP LIMITED - Vodacom Group Limited quarterly update for the period ended 31 December 2015

Release Date: 03/02/2016 07:05
Code(s): VOD     PDF:  
Wrap Text
Vodacom Group Limited quarterly update for the
 period ended 31 December 2015

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

News release

Vodacom Group Limited quarterly update for the period ended 31 December 2015

3 February 2016

Salient features

- Group revenue up 8.7% (7.6%*) to R21 741 million with service revenue up 8.9% (7.6%*) to R17 224 million
- Group data revenue increased 27.5% to R5 520 million, representing 32.0% of service revenue
- Group active customers up 6.8% to 65.2 million and active data customers grew 14.5% to 30.3 million
- South Africa service revenue grew 7.2% to R12 707 million
- South Africa ARPU stable as data revenue contribution increases and voice revenue trend improves
- International service revenue increased 15.2% (9.8%*) to R4 581 million; 26.6% of Group service revenue
- Group capital expenditure for the nine month period at R9 473 million, 15.4% of Group revenue


                                                                        Quarter ended                       Yoy % change
Rm                                                                      December 2015               Reported            Normalised*
Revenue                                                                        21 741                    8.7                   7.6
 South Africa                                                                  17 116                    7.1                   7.1
 International                                                                  4 740                   15.8                  10.1
Service revenue                                                                17 224                    8.9                   7.6
 South Africa                                                                  12 707                    7.2                   7.2
 International                                                                  4 581                   15.2                   9.8

All growth rates quoted are year-on-year growth rates and refer to the quarter ended 31 December 2015 compared to the quarter ended 31 December 2014, unless
stated otherwise.

Shameel Joosub, Vodacom Group CEO commented:

"We successfully executed on our strategy and achieved another quarter of improving revenue trends. The two biggest highlights in the quarter are the accelerated
service revenue growth of 7.2% in South Africa and the 6.8% increase in the Group customer base to 65.2 million. In South Africa, the take-up of our personalised
offer "Just for You" was excellent and contributed to the 15.9% reduction in effective voice rates. The International segment delivered robust service revenue growth
of 15.2%.

Our performance in the quarter reflects the positive impact from our substantial network investment of R9.5 billion across all our operations in the nine months. We have
expanded our network coverage and increased data speeds to secure network leadership.

Customer demand for high speed mobile data is growing across our footprint, supporting a 27.5% increase in Group data revenue. Active data customers increased
14.5% to 30.3 million as we increased sales of more affordable data devices in the quarter.

We expect revenue growth to taper slightly into our last quarter of the financial year due to a stronger prior year comparative and a weaker outlook for the consumer in
South Africa due to the drought and weaker exchange rate."

* Normalised growth adjusted at a constant currency using current year as base (collectively 'foreign exchange').
  Refer below for a reconciliation of adjustments.

Operating review

South Africa

Service revenue growth accelerated to 7.2%, supported by continued growth in our customer base, stable ARPU and strong customer demand for 3G and 4G services.
Revenue grew at 7.1% to R17 116 million, underpinned by a 7.7% increase in equipment revenue with three million devices sold in the quarter.

Total active customers increased 8.7% year-on-year to reach 34.1 million. Active prepaid customers increased 10.3% to 29.2 million, largely due to the success of our
personalised offers and summer campaign. The continued adoption of prepaid voice bundles, particularly the new "Just for You" offer, supported customer acquisition
together with an improved voice revenue trend. Prepaid voice bundle purchases increased 36.8% to over 207 million in the quarter. Contract customer additions in the
quarter were negatively impacted by 75 thousand disconnections by Altech Autopage (Pty) Limited, resulting in overall flat year-on-year growth in the contract
customer base. We have migrated 83% of contract customers to new price plans with better value offerings and as a result, contract in-bundle spend is 71% of contract
customer revenue.

Data revenue increased 27.3% to R4 487 million due to sustained demand for data services and customers upgrading to 3G and 4G devices. The improved affordability
of both devices and data bundles supported a 46.6% increase in data traffic. Active data customers increased 14.0% to 19.1 million. Active smart devices on the network
increased 28.2% to 13.5 million and the average amount of data used per month increased 22.0% on such devices. Data revenue comprises 35.3% of service revenue up
from 29.7% a year ago.

Vodacom Business demonstrated strong commercial momentum in both the mobile and fixed businesses. Fixed-line and business managed services revenue now
comprises 12.7% of total Vodacom Business service revenue. Growth was supported by new customer wins for IPVPN connectivity solutions as well growing demand
for cloud and hosting services. Machine-to-machine ('M2M') customers increased 29.6% to 2.2 million. Vodacom Business service revenue now contributes 22.2% of
South African service revenue.

Capital expenditure in the quarter of R2.2 billion allowed us to expand LTE/4G population coverage to 54% from 47% at 30 September 2015 and 3G population
coverage now stands at 98.3%.

On 23 September 2015, the Group entered into a purchase agreement with Altech Autopage (Pty) Limited, where they will dispose of their Vodacom customer base to
the Group. The transaction is subject to the approval of the Competition authorities.

As announced on 10 December 2015, the Neotel transaction has been modified to the extent that Vodacom acquires the majority of Neotel's assets related to its fixed
line business, excluding inter alia, Neotel's spectrum and licences. Neotel is expected to make a roaming offer to all mobile network operators.


International

Service revenue in our International operations, which accounts for 26.6% of Group service revenue, remained robust at 15.2% (9.8%*), underpinned by customer and
data revenue growth. Growth in DRC and Mozambique accelerated as a result of improved ARPU and customer growth. Service revenue growth weakened in Tanzania,
reflecting a significantly more competitive market place.

Active customers increased 4.9% to 31.1 million. In the DRC, the Government ordered all unregistered customers to be disconnected by 28 December 2015. Since
then, Vodacom has suspended customers with no registration records and communicated to such customers the requirement to register to avoid disconnection. In
Mozambique, following a customer registration deadline on 28 November 2015, Vodacom has gone through a similar process. Consistent with experience in Q3, gross
connections are expected to be negatively impacted by both disconnections and suspensions while customers and the distribution channels familiarise themselves with
the new processes.

Data revenue grew 28.4% driven by a 15.2% increase in active data customers to 11.2 million, representing 36.1% of the active customer base. Data contributed 22.5%
of service revenue up from 20.2% a year ago. We continue to drive data growth, ensuring customers have access to better low cost smart devices, such as Vodacom
Kicka and SmartTab, expanding 3G and LTE/4G network coverage and driving the adoption of data bundles.

M-Pesa continues to grow strongly in all our markets, fuelled by expansion in the distribution channel and a growing ecosystem. M-Pesa revenue increased 16.9% in
the quarter compared to 9.4% in the prior quarter. We added 567 thousand customers in the quarter, increasing the number of active customers by 28.6% to 9.7
million1. In Tanzania, M-Pawa (savings and loan product) is gaining traction with 1.5 million customers actively using the service.

Capital expenditure in the quarter was R1 071 million as we continued to expand network coverage and increase capacity. During the quarter, we successfully renewed
our 2G mobile licence in DRC until January 2028. We have obtained additional spectrum in the DRC for the same duration. In September 2015, the regulator has confirmed to
Vodacom Lesotho its intention to renew our mobile licence before its expiry in June 2016. We are currently finalizing the terms of the licence.

1. Number of unique customers who have generated revenue related to M-Pesa in the past 90 days, of these 6.6 million have been active in the past 30 days in the
   International operations.

Financial review

Revenue for the quarter ended

                                              December        September        December               Yoy % change                    Quarterly % change
Rm                                                2015             2015            2014         Reported        Normalised*        Reported     Normalised*
South Africa                                    17 116           16 098          15 987              7.1               7.1              6.3            6.3
International                                    4 740            4 435           4 092             15.8              10.1              6.9            1.7
Corporate and eliminations                        (115)            (136)            (86)            33.7              33.7            (15.4)         (15.4)
Revenue                                         21 741           20 397          19 993              8.7               7.6              6.6            5.4

Service revenue for the quarter ended

                                              December        September        December                Yoy % change                   Quarterly % change
Rm                                                2015             2015            2014         Reported        Normalised*        Reported     Normalised*
South Africa                                    12 707           12 348          11 856              7.2               7.2              2.9            2.9
International                                    4 581            4 334           3 975             15.2               9.8              5.7            0.7
Corporate and eliminations                         (64)             (98)            (16)          >200.0            >200.0            (34.7)         (34.7)
Service revenue                                 17 224           16 584          15 815              8.9               7.6              3.9            2.5

Revenue for the quarter ended 31 December 2015

                                                                  Yoy %                            Yoy %        Corporate/                           Yoy %
Rm                                        South Africa           change   International           change      Eliminations            Group         change
Mobile contract revenue                          5 807              7.2             338             39.7                (3)           6 142            8.5
 In bundle                                       4 150             11.2              66              8.2                (1)           4 215           11.2
 Out of bundle                                   1 657             (1.8)            272             50.3                (2)           1 927            3.2
Mobile prepaid revenue                           5 405              7.4           3 326             14.0                 -            8 731            9.8
 In bundle                                       1 095             43.0             585             27.2                 -            1 680           37.0
 Out of bundle                                   4 310              1.0           2 741             11.5                 -            7 051            4.9
Mobile customer revenue                         11 212              7.3           3 664             15.9                (3)          14 873            9.3
Mobile interconnect                                471            (13.7)            431             11.4               (26)             876           (5.1)
Other service revenue                            1 024             19.1             486             13.6               (35)           1 475           14.9
Service revenue                                 12 707              7.2           4 581             15.2               (64)          17 224            8.9
Equipment revenue                                4 177              7.7             107             37.2                (7)           4 277            8.6
Non-service revenue                                232             (7.9)             52             33.3               (44)             240           (0.4)
Revenue                                         17 116              7.1           4 740             15.8              (115)          21 741            8.7


Of which mobile voice                            6 280             (2.2)          2 516             13.1                (2)           8 794            1.7
Of which mobile messaging                          640             (1.8)            120            (11.8)                1              761           (3.4)
Of which mobile data                             4 487             27.3           1 032             28.4                 1            5 520           27.5

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.

Revenue for the quarter ended 31 December 2014

                                                                  Yoy %                            Yoy %        Corporate/                           Yoy %
Rm                                        South Africa           change   International           change      Eliminations            Group         change
Mobile contract revenue                          5 418              1.5             242              6.6                (1)           5 659            1.8
 In bundle                                        3731              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.

Key indicators
South Africa

                                                                               December        September        December               Yoy         Quarterly
                                                                                   2015             2015            2014          % change          % change
Active customers1 (thousand)                                                     34 103           33 745          31 379               8.7               1.1
Prepaid                                                                          29 206           28 821          26 479              10.3               1.3
Contract                                                                          4 897            4 924           4 900              (0.1)             (0.5)
Active data customers2 (thousand)                                                19 099           17 811          16 751              14.0               7.2
Machine to machine customers3 (thousand)                                          2 174            2 057           1 677              29.6               5.7
MOU per month4                                                                      138              130             130               6.2               6.2

Prepaid                                                                             129              119             120               7.5               8.4
Contract                                                                            192              189             188               2.1               1.6
Total ARPU5 (rand per month)                                                        116              112             116                 -               3.6

Prepaid                                                                              66               63              67              (1.5)              4.8
Contract                                                                            409              393             386               6.0               4.1
Traffic6 (millions of minutes)                                                   13 964           13 073          12 402              12.6               6.8
Outgoing                                                                         11 516           10 670           9 827              17.2               7.9
Incoming                                                                          2 448            2 403           2 575              (4.9)              1.9

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.
3. Machine-to-machine ('M2M') is the remote wireless interchange between two or more predefined devices or a central station without direct relationship with an end
   customer, in order to support a specific business process or product. M2M customers have been restated to include customers on the Global Data Service Platform
   ('GDSP').
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.
6. 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.

International

                                                                               December        September        December               Yoy         Quarterly
                                                                                   2015             2015            2014          % change          % change
Active customers1 (thousand)                                                     31 130           31 373          29 676               4.9              (0.8)
Tanzania                                                                         12 714           12 521          11 810               7.7               1.5
DRC                                                                              11 814           12 118          11 493               2.8              (2.5)
Mozambique                                                                        5 240            5 464           5 049               3.8              (4.1)
Lesotho                                                                           1 362            1 270           1 324               2.9               7.2

Active data customers2 (thousand)                                                11 231           10 496           9 749              15.2               7.0
Tanzania                                                                          5 727            5 553           5 160              11.0               3.1
DRC                                                                               2 806            2 297           2 324              20.7              22.2
Mozambique                                                                        2 178            2 219           1 817              19.9              (1.8)
Lesotho                                                                             520              427             448              16.1              21.8

MOU per month3
Tanzania                                                                            130              123             154             (15.6)              5.7
DRC                                                                                  39               43              45             (13.3)             (9.3)
Mozambique                                                                          105              104             111              (5.4)              1.0
Lesotho                                                                              83               73              69              20.3              13.7

Total ARPU4 (rand per month)
Tanzania                                                                             39               38              43              (9.3)              2.6
DRC                                                                                  41               39              30              36.7               5.1
Mozambique                                                                           54               51              55              (1.8)              5.9
Lesotho                                                                              65               62              58              12.1               4.8

Total ARPU4 (local currency per month)
Tanzania (TZS)                                                                    5 957            6 265           6 593              (9.6)             (4.9)
DRC (USD)                                                                           2.9              3.0             2.7               7.4              (3.3)
Mozambique (MZN)                                                                    180              157             156              15.4              14.6

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.
3. 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.
4. Total ARPU is calculated by dividing the average monthly service revenue by the average monthly active customers during the period.

Historical financial review

Revenue

                                               December         September             June           March         December         September             June
Rm                                                 2015              2015             2015            2015             2014              2014             2014
South Africa                                     17 116            16 098           15 598          15 879^          15 987            15 380^^         14 791
International                                     4 740             4 435            4 095           4 081            4 092             3 984            3 591
Corporate and eliminations                         (115)             (136)            (134)           (165)             (86)             (105)             (95)
Revenue                                          21 741            20 397           19 559          19 795           19 993            19 259           18 287

Service revenue

                                               December         September             June           March         December         September             June
Rm                                                 2015              2015             2015            2015             2014              2014             2014
South Africa                                     12 707            12 348           11 762          11 739^          11 856            11 995^^         11 442
International                                     4 581             4 334            3 945           3 950            3 975             3 873            3 493
Corporate and eliminations                          (64)              (98)             (47)            (62)             (16)              (40)             (38)
Service revenue                                  17 224            16 584           15 660          15 627           15 815            15 828           14 897

Historical key indicators

South Africa

                                               December         September             June           March         December         September             June
                                                   2015              2015             2015            2015             2014              2014             2014
Active customers1 (thousand)                     34 103            33 745           33 309          32 115           31 379            32 613           32 516
Prepaid                                          29 206            28 821           28 368          27 202           26 479            27 806           27 723
Contract                                          4 897             4 924            4 941           4 913            4 900             4 807            4 793
Active data customers2 (thousand)                19 099            17 811           17 741          16 595           16 751            16 679           16 996
Machine-to-machine customers3
(thousand)                                        2 174             2 057            1 925           1 766            1 677             1 634            1 531

MOU per month4                                      138               130              124             129              130               124              122
Prepaid                                             129               119              113             118              120               113              112
Contract                                            192               189              184             188              188               190              181

Total ARPU5 (rand per month)                        116               112              110             113              116               115              110
Prepaid                                              66                63               62              64               67                67               64
Contract                                            409               393              381             374              386               389              372

Traffic6 (millions of minutes)                   13 964            13 073           12 181          12 158           12 402            12 182           11 776
Outgoing                                         11 516            10 670            9 856           9 741            9 827             9 570            9 392
Incoming                                          2 448             2 403            2 325           2 417            2 575             2 612            2 384

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.
3. Machine-to-machine ('M2M') is the remote wireless interchange between two or more predefined devices or a central station without direct relationship with an
   end customer, in order to support a specific business process or product. M2M customers have been restated to include customers on the Global Data Service
   Platform ('GDSP').
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.
6. 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.

^  During Q4 2015 we consolidated a subsidiary X-Link resulting in a positive adjustment of R164 million in South Africa.
^^ During Q2 2015 we changed our accounting estimates for unexpired credits for prepaid voucher deferrals resulting in a positive adjustment of R325 million in
   South Africa.

International

                                               December         September             June           March         December         September             June
                                                   2015              2015             2015            2015             2014              2014             2014
Active customers1 (thousand)                     31 130            31 373           30 193          29 533           29 676            28 367           27 086
Tanzania                                         12 714            12 521           11 996          12 172           11 810            11 316           10 638
DRC                                              11 814            12 118           11 922          11 216           11 493            11 003           10 502
Mozambique                                        5 240             5 464            5 031           4 877            5 049             4 913            4 604
Lesotho                                           1 362             1 270            1 244           1 268            1 324             1 135            1 342

Active data customers2 (thousand)                11 231            10 496           10 292           9 878            9 749             9 188            8 311
Tanzania                                          5 727             5 553            5 501           5 265            5 160             4 963            4 480
DRC                                               2 806             2 297            2 332           2 338            2 324             2 241            2 016
Mozambique                                        2 178             2 219            2 046           1 879            1 817             1 636            1 474
Lesotho                                             520               427              413             396              448               348              341

MOU per month3
Tanzania                                            130               123              120             123              154               165              158
DRC                                                  39                43               34              33               45                47               39
Mozambique                                          105               104               97              89              111               124              131
Lesotho                                              83                73               68              63               69                58               48

Total ARPU4 (rand per month)
Tanzania                                             39                38               36              39               43                45               42
DRC                                                  41                39               35              32               30                33               31
Mozambique                                           54                51               51              51               55                52               49
Lesotho                                              65                62               62              60               58                50               43

Total ARPU4 (local currency per month)
Tanzania (TZS)                                    5 957             6 265            6 046           5 952            6 593             6 978            6 655
DRC (USD)                                           2.9               3.0              2.9             2.7              2.7               3.1              3.0
Mozambique (MZN)                                    180               157              154             146              156               147              146

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.
3. 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.
4. 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 of 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
                                                                            15/16                                     15/16
Revenue
Group                                                                         8.7                  (1.1)                7.6
International                                                                15.8                  (5.7)               10.1

Service revenue
Group                                                                         8.9                  (1.3)                7.6
International                                                                15.2                  (5.4)                9.8

Quarter on quarter reconciliation
                                                                                    Translation foreign
                                                                        Reported3             exchange4          Normalised
                                                                         % change                   ppt            % change
                                                                            15/16                                     15/16
Revenue
Group                                                                         6.6                  (1.2)                5.4
International                                                                 6.9                  (5.2)                1.7

Service revenue
Group                                                                         3.9                  (1.4)                2.5
International                                                                 5.7                  (5.0)                0.7

Notes:

1. The reported percentage change relates to the quarter to date year-on-year percentage growth between 31 December 2014 and 31 December 2015. The Group's
   presentation currency is the South African rand. Our International operations include functional currencies for example United States dollar, Tanzanian shilling,
   Mozambican metical, Nigerian naira and Zambian kwacha. 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 2015 average rate (which is derived by dividing the individual subsidiary's
   translated rand value with the functional currency for the quarter) to 31 December 2014 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.
3. The reported percentage change relates to the quarter to date quarter on quarter percentage growth between 30 September 2015 and 31 December 2015. The Group's
   presentation currency is the South African rand. Our International operations have functional currencies, other than the South African rand, which include the
   United States dollar, Tanzanian shilling, Mozambican metical, Nigerian naira and Zambian kwacha. The prevailing exchange rates for the current and comparative
   periods are disclosed below.
4. 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 2015 average rate (which is derived by dividing the individual subsidiary's
   translated rand value with the functional currency for the quarter) to 30 September 2015 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              Yoy        Quarterly
                                                                             2015              2015              2014         % change         % change
USD/ZAR                                                                     14.22             13.00             11.22             26.7              9.4
ZAR/MZN                                                                      3.30              3.10              2.84             16.2              6.7
ZAR/TZS                                                                    152.46            164.44            152.79             (0.2)            (7.3)
EUR/ZAR                                                                     15.56             14.47             14.01             11.1              7.5

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

Trademarks

Vodafone, the Vodafone logo, Vodafone Mobile Broadband, Vodafone WebBox, Vodafone Passport, Vodafone live!, Power to You, Vodacom, Vodacom M-Pesa,
Vodacom Millionaires, Vodacom 4 Less and Vodacom Change the World are trademarks of Vodafone Group Plc (or have applications pending). Other product and
company names mentioned herein may be the trademarks of their respective owners.

Forward-looking statements

This quarterly update which sets out the quarterly results for Vodacom Group Limited for the three months ended 31 December 2015 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.

All subsequent oral or written forward-looking statements attributable to the Group or any member thereof or any persons acting on their behalf are expressly qualified
in their entirety by the cautionary statements above and below. Vodacom expressly disclaims any liability in respect of the content of any forward looking statement and
also expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein or to reflect any
change in their expectations with regard thereto or any change in events, conditions or circumstances on which any such forward-looking statement is based.

Sponsor:                          UBS South Africa (Pty) Limited
ADR depository bank:              Deutsche Bank Trust Company Americas

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