Wrap Text
Vodacom Group Limited trading update for the quarter ended 31 December 2016
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 trading update for the quarter ended 31 December 2016
1 February 2017
Salient features
- Group service revenue up 1.3% to R17 443 million with revenue up 1.2% to R21 222 million, normalised growth, excluding currency translation effects,
was 4.4%* and 3.9%* respectively
- We added 1.6 million Group active customers during the quarter, 690 000 in South Africa and 876 000 in our International operations, to now reach
65.2 million active customers across the Group
- Group data revenue increased 18.4% to R6 533 million, representing 37.5% of service revenue
- South Africa service revenue grew 5.5% to R13 410 million, driven by strong data revenue growth of 22.0%
- International service revenue declined 8.2% (+3.4%*) to R4 206 million; impacted by customer registration processes and currency volatility
Quarter ended Yoy % change
Rm December 2016 Reported Normalised*
Group revenue 21 222 1.2 3.9
South Africa 17 142 4.9 4.9
International 4 316 (8.9) 3.0
Group service revenue 17 443 1.3 4.4
South Africa 13 410 5.5 5.5
International 4 206 (8.2) 3.4
Shameel Joosub, Vodacom Group CEO commented:
I am pleased with what we achieved in the quarter. Performance was driven by strong customer growth in South Africa and strong data demand. In
our International operations the effect of customer disconnections in Q4 of the prior year are still impacting its performance. Group service revenue
growth of 1.3% was impacted by the strengthening of the rand to reporting currencies in our International operations, excluding which, normalised
growth was 4.4%*.
Strong growth in South Africa was delivered through our strategy of sustained investment in network infrastructure, growing data demand and
successful execution of our pricing strategy. This includes the continued impact of our segmented pricing offers, a key highlight of this quarter.
Combined with our network advantage and delivering value for money propositions, this contributed to almost 700 000 new customers joining our
network in South Africa this quarter, showcasing the success of our focus on bundle adoption through 'Just 4 You,' our youth proposition under the
NXTLVL banner and our summer campaign. Strong growth in data demand outstripped declining voice revenues with service revenue growth of 5.5%
to R13.4 billion in South Africa.
In our International operations, we added 876 000 customers in the quarter mirroring the positive trend that we reported in front at our Interim
Results, as we continue to claw back many of the customers disconnected during Q4 of the prior year. Challenging conditions in the DRC were offset
by a better performance in Tanzania and sustained growth in Mozambique resulting in a 3.4%* increase in normalised International service revenue.
The strong demand for data continues with traffic growth of 44.8% in South Africa and 61.7% across our International operations. Data now comprises
40.8% (from 35.3% a year ago) of service revenue in South Africa and 25.2% (from 22.5% a year ago) in the International operations. To support this
continued growth and to strengthen our network and service differentiation, we invested R2.7 billion in our infrastructure including R2.1 billion in
South Africa where we expanded 4G coverage to 70% of the population and 3G to 99%. Including the current period, capital expenditure across
the Group will total at R40.6 billion over a three-year period with R27.4 billion in South Africa alone.
As part of our effort to continuously reduce the cost to communicate in South Africa through our bundle pricing strategy, voice and data prices fell by
17.6% and 15.4% respectively as significantly more prepaid and contract customers benefitted from using bundles. Over the past four years we have
reduced the price of data by more than 60%. Another significant win in helping bridge the digital divide was the introduction of a 4G device below the
key R1 000 price-point to add to the success of the Smart Kicka 2, a low-priced yet high quality 3G smartphone.
The unavailability of spectrum, further delayed by the publication of the White Paper by the Ministry of Telecommunications and Postal Services in
October last year, remains a concern. We have been involved in a number of positive engagements with relevant industry stakeholders as we seek to
find a workable solution to make broadband even more accessible and affordable for South Africans. This is the express objective of the White Paper
and Vodacom is aligned with this goal.
* Normalised growth adjusted at a constant currency using the current year as the base. Refer below for a reconciliation of
adjustments. All growth rates quoted are year-on-year growth rates and refer to the quarter ended 31 December 2016 compared
to the quarter ended 31 December 2015, unless stated otherwise.
Operating review
South Africa
Service revenue growth was sustained at 5.5% to R13 410 million underpinned by solid customer net additions and continued growth in data demand.
The declining trend in equipment revenue reversed to a growth of 1.6%. Device sales volumes increased as a result of improved selling prices, which
were aided by the stronger rand against major currencies. This resulted in overall revenue growth of 4.9% to R17 142 million.
Our segmented pricing offers, catering for specific customer needs continues to deliver strong results. Nearly a million youth customers have
registered for our youth proposition 'NXTLVL', while 'Just 4 You' personalised offers continue to boost bundle sales and engagement.
Active customers increased 6.7% reaching 36.4 million following a successful summer campaign and our bundle proposition resonated with
customers. Customer adoption of affordable bundles continues to improve. During the quarter we sold 418 million bundles up 34.8%. The number of
bundle users increased 13.3% to 16.3 million. Active prepaid customers increased 6.8% to 31.2 million largely due to the success of our personalised
'Just 4 You' offers. Prepaid ARPU was down as we continue to attract value seeking customers. Active contract customers increased by 143 000 in the
quarter to 5.2 million with contract ARPU up 1.2% to R414. ARPU growth was impacted by the customer disconnections of 75 000 by Altech Autopage
(Pty) Limited and consequent revenue deferral release of R102 million in the prior year, excluding which ARPU grew 3.6%.
Voice revenue declined 6.2%, due to the lapping of the 'Just 4 You' launch in the prior year, and a one-off impact from Altech Autopage (Pty) Limited in
the prior year. Underlying voice revenue decline was 4.6%.
Data revenue growth improved to 22.0% to R5 473 million. Data now makes up 40.8% of service revenue compared to 35.3% a year ago, with active
data customers up 4.9% to 19.3 million. Improvements made to our out-of-data-bundle notification journey have resulted in an improved customer
experience by giving customers more control. This together with the success of our pricing strategy of making data more affordable to all customers
has resulted in a 49.0% increase in bundle sales and an overall effective price per MB reduction of 15.4%. Smartphone sales volumes accelerated this
quarter, up 29.0%, comprising 62.3% of device sales. We added 1.1 million 4G customers in the quarter to reach 4.8 million as devices became more
affordable. We launched a new 4G device at sub R1 000 in the quarter. Active smart devices on the network increased 23.1% to 16.6 million with the
average monthly data usage on these devices at 667MB contributing to the 44.8% improvement in data traffic.
Enterprise continues to grow with revenue up 13.6%1 and now contributed 24.5% (2016: 22.2%) of service revenue. Supported by our strategic
enterprise partnerships with IBM and SAP HANA. Our fixed-line and business managed services revenue grew 29.1% and our cloud and hosting services
delivered strong revenue growth of 25.8%. Our mobile customer revenue delivered strong growth of 12.1%1 to R2 027 million as we continue to add
new customers. Internet of things (IoT) connections increased 29.3% to 2.8 million. We have secured certain mobile, voice and data communications
contracts with national and provincial government departments' for a period of four years.
1. Growth excluding the impact from the acquisition of Autopage in the prior year.
Capital expenditure of R2.1 billion in the quarter allowed us to expand 4G population coverage to 70.0%, up from 54.1% a year ago. We extended our
high-speed transmission to 91.4% of our sites. As data demand continues to grow exponentially we entered into a commercial agreement to roam on
the newly built data network of Wireless Business Solution (WBS) for additional capacity.
International
Service revenue declined 8.2% to R4 206 million, impacted by the improvement of the rand against mainly the US dollar and continued weakness
in the Mozambican metical. Normalised for currency translation effects, underlying growth was up 3.4%*. The improvement in underlying trend
was driven by better performance in Tanzania benefitting from the launch of 'Just 4 You' in August, sustained growth in Mozambique through strong
commercial execution, offset by challenging trading conditions in the DRC and the impacts from customer registration requirements in the majority of
our markets.
Active customers are down 7.5% to 28.8 million as a result of disconnections during the fourth quarter of the prior year, in compliance with customer
registration requirements. We have managed to claw back a significant amount of these customers resulting in positive trends in net customer
additions, adding 876 000 customers in the quarter.
Mobile data revenue grew 2.6% (12.8%*) driven by a 12.4% increase in active data customers to 12.6 million, representing 43.8% of the active
customer base. Data traffic grew 61.7%, reflecting strong demand for mobile data services in all our markets. Mobile data revenue now comprised
25.2% (2016: 22.5%) of International service revenue.
M-Pesa revenue continues to grow strongly at 12.4% (17.4%*). We added 1.1 million customers in the quarter to reach 12.0 million2. Tanzania continues
to improve on the M-Pesa offering with 39% of airtime purchases going through the M-Pesa system in the quarter compared to 32% in the prior year.
DRC has more than doubled their number of customers, and in Mozambique 42.6% of customers are now using the service.
2. Number of unique customers who have generated revenue related to M-Pesa in the past 90 days,of these 8.8 million have been active in the past 30 days.
Capital expenditure of R612 million enabled us to continue to invest in all our markets to strengthen network and service differentiation and to
support data growth and wider voice coverage. During the quarter, 2G and 3G sites increased 8.4% and 32.1% respectively.
Regulatory matters
South Africa Integrated information and communication technology ICT Policy White Paper (White Paper)
The Ministry of Telecommunications and Postal Services published a White Paper, as approved by cabinet, on 2 October 2016. We support the
objectives of the White Paper to make broadband more accessible and affordable for all. However, as it now stands, we do not believe the White Paper
will achieve these objectives.
The Group believes the White Paper, as it currently stands, contains a number of policy elements and interventions which are unclear and require more
detail. For the White Paper to have legal effect, a number of new laws would need to be promulgated and/or existing laws amended. Consultation with
all stakeholders would be required to give effect to these changes.
Initial exploratory meetings for implementation of the policy paper between the Minister and industry were held during November and December with
the objective of finding a workable solution to meet South Africa's social and economic objectives.
The Invitation to Apply (ITA) for high demand spectrum issued by ICASA, which is a polar opposite approach to the White Paper, remains subject to legal
challenge from the Ministry, the outcome of which is still pending.
Listing of Vodacom Tanzania
In June 2016, the Parliament of Tanzania passed The Finance Act, 2016 which amends listing requirements under the Electronic and Postal
Communication Act, 2010, to introduce mandatory listing requirements and require licensed telecommunications operators to list 25% of their
authorised share capital through an initial public offering (IPO) on the Dar es Salaam stock exchange (DSE) within six months from 1 July 2016 (listing
requirements).
Vodacom Tanzania submitted its prospectus with the Capital Markets and Securities Authority Tanzania (CMSA) during November 2016 and is awaiting
approval before the offering can proceed.
1.Number of unique customers who have generated revenue related to M-Pesa in the past 90 days, of these 8.8 million have been active in the past 30 days.
Financial review
Revenue for the quarter ended1
Quarterly %
31 December 30 September 31 December Yoy % change change
Rm 2016 2016 2015 Reported Normalised* Reported Normalised*
South Africa 17 142 16 003 16 347 4.9 4.9 7.1 7.1
International 4 316 4 429 4 740 (8.9) 3.0 (2.6) (0.4)
Corporate and eliminations (236) (183) (115) (105.2) (105.2) (29.0) (29.0)
Revenue 21 222 20 249 20 972 1.2 3.9 4.8 5.3
Service revenue for the quarter ended
Quarterly %
31 December 30 September 31 December Yoy % change change
Rm 2016 2016 2015 Reported Normalised* Reported Normalised*
South Africa 13 410 13 037 12 707 5.5 5.5 2.9 2.9
International 4 206 4 246 4 581 (8.2) 3.4 (0.9) 1.2
Corporate and eliminations (173) (121) (64) (170.3) (170.3) (43.0) (43.0)
Service revenue 17 443 17 162 17 224 1.3 4.4 1.6 2.2
Revenue for the quarter ended 31 December 2016
South Africa Yoy % International Yoy % Corporate/ Group Yoy %
Rm change change Eliminations change
Mobile contract revenue 6 097 5.0 222 (34.3) - 6 319 2.9
In bundle2,3 4 346 4.7 66 - 1 4 413 4.7
Out of bundle5 1 751 5.7 156 (42.6) (1) 1 906 (1.1)
Mobile prepaid revenue 5 656 4.6 3 148 (5.4) 2 8 806 0.9
In bundle2,4 1 404 28.2 337 (11.3) - 1 741 18.0
Out of bundle5 4 252 (1.3) 2 811 (4.6) 2 7 065 (2.6)
Mobile customer revenue 11 753 4.8 3 372 (8.0) (1) 15 124 1.7
Mobile interconnect 470 (0.2) 373 (13.5) (102) 741 (15.4)
Other service revenue 1 187 15.9 461 (5.1) (70) 1 578 7.0
Service revenue 13 410 5.5 4 206 (8.2) (173) 17 443 1.3
Equipment revenue 3 465 1.6 71 (33.6) (20) 3 516 0.2
Non-service revenue 267 15.6 39 (25.0) (43) 263 10.0
Revenue 17 142 4.9 4 316 (8.9) (236) 21 222 1.2
Included in service revenue
Mobile voice 5 892 (6.2) 2 216 (11.9) (2) 8 106 (7.8)
Mobile data 5 473 22.0 1 059 2.6 1 6 533 18.4
Mobile messaging 642 0.5 102 (15.0) - 744 (2.2)
Notes:
1. Prior quarter South Africa and Group revenue numbers have been restated in line with the restatement explained in our annual results for the year
ended 31 March 2016 available on www.vodacom.com.
2. 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.
3. Mobile in bundle revenue - Contract: Revenue from all bundles and add-ons lasting 30 days or more.
4. Mobile in bundle revenue - Prepaid: Revenue from bundles lasting seven days or more.
5. 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 2015
South Africa International Corporate/ Group
Rm Eliminations
Mobile contract revenue 5 807 338 (3) 6 142
In bundle 4 150 66 (1) 4 215
Out of bundle 1 657 272 (2) 1 927
Mobile prepaid revenue 5 405 3 326 - 8 731
In bundle 1 095 380 - 1 475
Out of bundle 4 310 2 946 - 7 256
Mobile customer revenue 11 212 3 664 (3) 14 873
Mobile interconnect 471 431 (26) 876
Other service revenue 1 024 486 (35) 1 475
Service revenue 12 707 4 581 (64) 17 224
Equipment revenue1 3 409 107 (7) 3 509
Non-service revenue 231 52 (44) 239
Revenue1 16 347 4 740 (115) 20 972
Included in service revenue
Mobile voice 6 280 2 516 (2) 8 794
Mobile data 4 487 1 032 1 5 520
Mobile messaging 640 120 1 761
Note:
1. Prior quarter South Africa and Group revenue numbers have been restated in line with the restatement explained in our annual results for the year
ended 31 March 2016 available on www.vodacom.com.
Key indicators
South Africa
31 December 30 September 31 December Yoy Quarterly
2016 2016 2015 % change % change
Active customers1 (thousand) 36 375 35 685 34 103 6.7 1.9
Prepaid 31 188 30 641 29 206 6.8 1.8
Contract 5 187 5 044 4 897 5.9 2.8
Active data customers2 (thousand) 19 261 18 158 18 353 4.9 6.1
Internet of Things connections3 (thousand) 2 810 2 626 2 174 29.3 7.0
MOU per month4 145 136 138 5.1 6.6
Prepaid 138 127 129 7.0 8.7
Contract 187 192 192 (2.6) (2.6)
Total ARPU5 (rand per month) 114 112 116 (1.7) 1.8
Prepaid 64 63 66 (3.0) 1.6
Contract 414 415 409 1.2 (0.2)
Traffic6 (millions of minutes) 15 550 14 458 13 964 11.4 7.6
Outgoing 13 158 12 062 11 516 14.3 9.1
Incoming 2 392 2 396 2 448 (2.3) (0.2)
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 have been restated to exclude customers with free allocated data bundles used. Active data customers are based on the
number of unique users generating billable data traffic during the month. Also included are users on integrated tariff plans, or who have access to
corporate APNs, and users who have been allocated a revenue generating data bundle during this month. A user is defined as being active if they are
paying a contractual monthly fee for this service or have used the service during the reported month.
3. Internet of Things (IoT), previously machine-to-machine, 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.
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
31 December 30 September 31 December Yoy Quarterly
2016 2016 2015 % change % change
Active customers1 (thousand) 28 794 27 918 31 130 (7.5) 3.1
Tanzania 12 419 12 354 12 714 (2.3) 0.5
DRC 9 702 9 204 11 814 (17.9) 5.4
Mozambique 5 208 4 987 5 240 (0.6) 4.4
Lesotho 1 465 1 373 1 362 7.6 6.7
Active data customers2 (thousand) 12 620 11 965 11 231 12.4 5.5
Tanzania 6 484 6 021 5 727 13.2 7.7
DRC 3 354 3 191 2 806 19.5 5.1
Mozambique 2 196 2 236 2 178 0.8 (1.8)
Lesotho 586 517 520 12.7 13.3
MOU per month3
Tanzania 162 162 130 24.6 -
DRC 48 56 39 23.1 (14.3)
Mozambique 122 123 105 16.2 (0.8)
Lesotho 90 81 83 8.4 11.1
Total ARPU4 (rand per month)
Tanzania 40 40 39 2.6 -
DRC 48 56 41 17.1 (14.3)
Mozambique 41 44 54 (24.1) (6.8)
Lesotho 66 63 65 1.5 4.8
Total ARPU4 (local currency per month)
Tanzania (TZS) 6 279 6 187 5 957 5.4 1.5
DRC (USD) 3.4 3.9 2.9 17.2 (12.8)
Mozambique (MZN) 223 223 180 23.9 -
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 based on the number of unique users generating billable data traffic during the month. Also included are users on
integrated tariff plans, or who have access to corporate APNs, and users who have been allocated a revenue generating data bundle during the
month. A user is defined as being active if they are paying a contractual monthly fee for this service or have used the service during the
reported month.
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 customer during the period.
Historical financial review
Revenue1
31 December 30 September 30 June 31 March 31 December 30 September 30 June
Rm 2016 2016 2016 2016 2015 2015 2015
South Africa 17 142 16 003 15 443 15 640 16 347 15 447 14 845
International 4 316 4 429 4 620 5 086 4 740 4 435 4 095
Corporate and eliminations (236) (183) (161) (173) (115) (136) (134)
Revenue 21 222 20 249 19 902 20 553 20 972 19 746 18 806
Revenue yoy % change for the quarter ended
Reported Normalised
31 December 30 September 30 June 31 December
% 2016 2016 2016 2016
South Africa 4.9 3.6 4.0 4.9
International (8.9) (0.1) 12.8 3.0
Corporate and eliminations (105.2) (34.6) (20.1) (105.2)
Revenue 1.2 2.5 5.8 3.9
Service revenue
31 December 30 September 30 June 31 March 31 December 30 September 30 June
Rm 2016 2016 2016 2016 2015 2015 2015
South Africa 13 410 13 037 12 426 12 503 12 707 12 348 11 762
International 4 206 4 246 4 479 4 903 4 581 4 334 3 945
Corporate and eliminations (173) (121) (99) (111) (64) (98) (47)
Service revenue 17 443 17 162 16 806 17 295 17 224 16 584 15 660
Service revenue yoy % change for the quarter ended
Reported Normalised
31 December 30 September 30 June 31 December
% 2016 2016 2016 2016
South Africa 5.5 5.6 5.6 5.5
International (8.2) (2.0) 13.5 3.4
Corporate and eliminations (170.3) 23.5 110.6 (170.3)
Service revenue 1.3 3.5 7.3 4.4
Note:
1. Prior quarter South Africa and Group revenue numbers have been restated in line with the restatement explained in our annual results for the year
ended 31 March 2016 available on www.vodacom.com.
Historical key indicators
South Africa
31 December 30 September 30 June 31 March 31 December 30 September 30 June
2016 2016 2016 2016 2015 2015 2015
Active customers1 (thousand) 36 375 35 685 35 112 34 178 34 103 33 745 33 309
Prepaid 31 188 30 641 30 148 29 265 29 206 28 821 28 368
Contract 5 187 5 044 4 964 4 913 4 897 4 924 4 941
Active data customers2 (thousand) 19 261 18 158 18 054 18 056 18 353 17 443 17 442
Internet of Things 2 810 2 626 2 515 2 264 2 174 2 057 1 925
connections3 (thousand)
MOU per month4 145 136 134 134 138 130 124
Prepaid 138 127 124 125 129 119 113
Contract 187 192 190 191 192 189 184
Total ARPU5 (rand per month) 114 112 109 112 116 112 110
Prepaid 64 63 60 62 66 63 62
Contract 414 415 401 404 409 393 381
Traffic6 (millions of minutes) 15 550 14 458 13 939 13 699 13 964 13 073 12 181
Outgoing 13 158 12 062 11 575 11 352 11 516 10 670 9 856
Incoming 2 392 2 396 2 364 2 347 2 448 2 403 2 325
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 have been restated to exclude customers with free allocated data bundles used. Active data customers are based on the
number of unique users generating billable data traffic during the month. Also included are users on integrated tariff plans, or who have access to
corporate APNs, and users who have been allocated a revenue generating data bundle during this month. A user is defined as being active if they are
paying a contractual monthly fee for this service or have used the service during the reported month.
3. Internet of Things (IoT), previously machine-to-machine, 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.
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 during the period by the average monthly active customers. 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
31 December 30 September 30 June 31 March 31 December 30 September 30 June
2016 2016 2016 2016 2015 2015 2015
Active customers1 (thousand) 28 794 27 918 26 722 27 127 31 130 31 373 30 193
Tanzania 12 419 12 354 12 060 12 375 12 714 12 521 11 996
DRC 9 702 9 204 8 486 8 527 11 814 12 118 11 922
Mozambique 5 208 4 987 4 817 4 826 5 240 5 464 5 031
Lesotho 1 465 1 373 1 359 1 399 1 362 1 270 1 244
Active data customers2 12 620 11 965 10 919 10 055 11 231 10 496 10 292
(thousand)
Tanzania 6 484 6 021 5 440 5 415 5 727 5 553 5 501
DRC 3 354 3 191 2 885 1 996 2 806 2 297 2 332
Mozambique 2 196 2 236 2 112 2 112 2 178 2 219 2 046
Lesotho 586 517 482 532 520 427 413
MOU per month3
Tanzania 162 162 158 124 130 123 120
DRC 48 56 50 40 39 43 34
Mozambique 122 123 109 111 105 104 97
Lesotho 90 81 79 78 83 73 68
Total ARPU4 (rand per month)
Tanzania 40 40 40 41 39 38 36
DRC 48 56 58 52 41 39 35
Mozambique 41 44 56 61 54 51 51
Lesotho 66 63 62 59 65 62 62
Total ARPU4 (local currency
per month)
Tanzania (TZS) 6 279 6 187 5 876 5 631 5 957 6 265 6 046
DRC (USD) 3.4 3.9 3.9 3.3 2.9 3.0 2.9
Mozambique (MZN) 223 223 207 185 180 157 154
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 have been restated to exclude customers with free allocated data bundles used. Active data customers are based on the
number of unique users generating billable data traffic during the month. Also included are users on integrated tariff plans, or who have access to
corporate APNs, and users who have been allocated a revenue generating data bundle during this month. A user is defined as being active if they are
paying a contractual monthly fee for this service or have used the service during the reported month.
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 during the period by the average monthly active customers. 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 the current period as the 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 being Price Waterhouse Coopers Inc.
Year-on-year reconciliation
Translation foreign
Reported1 exchange2 Normalised
% change ppt % change
Revenue
Group 1.2 2.7 3.9
International (8.9) 11.9 3.0
Service revenue
Group 1.3 3.1 4.4
International (8.2) 11.6 3.4
Data revenue
International 2.6 10.2 12.8
M-Pesa revenue
International 12.4 5.0 17.4
Quarter-on-quarter reconciliation
Translation foreign
Reported3 exchange4 Normalised
% change ppt % change
Revenue
Group 4.8 0.5 5.3
International (2.6) 2.2 (0.4)
Service revenue
Group 1.6 0.6 2.2
International (0.9) 2.1 1.2
Notes:
1. The reported percentage change relates to the quarter to date year-on-year percentage growth between 31 December 2015 and
31 December 2016. The Group's presentation currency is the South African rand. Our International operations utilise a number of functional
currencies, for example 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.
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 2016 average rate (which is
derived by dividing the individual subsidiary's translated rand value with the functional currency for the quarter) to 31 December 2015 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 2016 and
31 December 2016. The Group's presentation currency is the South African rand. Our International operations utilise a number of functional
currencies, for example 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 2016 average rate (which is derived
by dividing the individual subsidiary's translated rand value with the functional currency for the quarter) to 30 September 2016 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
31 December 30 September 31 December Yoy Quarterly
2016 2016 2015 % change % change
USD/ZAR 13.90 14.08 14.22 (2.3) (1.3)
ZAR/MZN 5.41 5.04 3.30 63.9 7.3
ZAR/TZS 156.99 155.33 152.46 3.0 1.1
EUR/ZAR 14.99 15.72 15.56 (3.7) (4.6)
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 update which sets out the quarterly results for Vodacom Group Limited for the three months ended 31 December 2016, 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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