Wrap Text
Vodacom Group Limited trading update for the quarter ended 30 June 2017
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 30 June 2017
20 July 2017
Salient features
- Group revenue grew 3.9% to R20.7 billion, normalised growth, excluding currency translation effects, was 7.7%*
- Group service revenue grew 1.7% to R17.1 billion, normalised growth, excluding currency translation effects, was 5.9%*
- South Africa revenue growth accelerated to 7.8% aided by stronger device sales. Service revenue growth was sustained
at 5.6%
- International revenue declined 8.2% and service revenue declined 8.0%. Normalised for currency fluctuations, revenue
and service revenue grew 8.0%*. Underlying growth improved as a result of strong commercial execution
- Group data revenue increased 15.1%, normalised 18.3%*, to R6.7 billion, representing 39.0% of service revenue
- We added 2.5 million customers during the quarter, 2.3 million in South Africa and 280 thousand in our International
operations, to reach almost 70 million customers across the Group
Quarter ended Yoy % change
Rm June 2017 Reported Normalised*
Group revenue 20 685 3.9 7.7
South Africa 16 654 7.8 7.8
International 4 240 (8.2) 8.0
Group service revenue 17 098 1.7 5.9
South Africa 13 123 5.6 5.6
International 4 122 (8.0) 8.0
Shameel Joosub, Vodacom Group CEO commented:
The solid performance the Group delivered in FY2017, continued into the first quarter of the current financial year. In South
Africa, revenue growth accelerated to 7.8%, aided by increased smartphone device sales. We sustained South African service revenue
growth of 5.6%, underpinned by the consistent and significant investment in our network infrastructure and IT systems,
aimed at further enhancing the customer experience. Our pricing transformation strategy continues to deliver greater value
for our 39 million South African customers. The 9.1% and 18.9% decline in effective voice and data prices respectively over
the quarter reflects our commitment to driving down the cost to communicate in South Africa. As I have stated previously,
there is more work to be done on this front, and we will be introducing additional measures this year to give greater control
to customers by improving our out-of-bundle pricing.
Although the International operations have turned the corner, currency volatility is still negatively impacting translation of
these results. We now have 30 million customers outside of South Africa, an increase of 12.0%. Following the phenomenal
success in South Africa of our 'Just 4 You' platform, customers in all our operations are starting to enjoy the benefits of this
personalised offers platform. We expect that this will contribute to the operational momentum in these markets. Following
the shareholder approval of the acquisition of a stake in Safaricom on 18 July this will further boost contribution outside of
South Africa.
Our strategy to become a leading digital company and empowering a connected society is our key area of focus. We continue to
make substantial investments in all our operations so that we maintain our network lead and IT advantage. This will enable
us to transform our product offerings, customer experience, operations and organisation to deliver on our digital aspirations.
We remain cognisant of the weaker economic conditions that prevail in South Africa as well as some of our larger markets
and have put measures in place should these conditions deteriorate materially in these markets.
* Normalised growth adjusted at a constant currency (using the current quarter 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
30 June 2017 compared to the quarter ended 30 June 2016, unless stated otherwise
Operating review
South Africa
Service revenue growth was sustained, growing 5.6%, to R13.1 billion for the quarter. This performance was supported by
continued growth in our customer base and strong demand for data. Revenue growth accelerated to 7.8%, underpinned by a
17.0% increase in equipment revenue, reflecting the successful delivery of our strategy of driving the uptake of data-enabled
devices. The sale of smartphones grew by 29.0%, comprising 57.4% of total device sales.
We added 2.3 million customers in the quarter, reaching 39.4 million, up 12.2%. Our segmented offerings and 'Just 4 You'
personalised offers continue to play an important role both in increasing customer activity and generating greater value
for our customers. During the quarter, we sold 553 million prepaid and contract bundles, up 68.3%, with the number of
bundle users increasing by 25.7% to 17.8 million. Prepaid customers increased by 2.2 million to 34.2 million, driven largely
by our successful personalised offers. Prepaid ARPU was down 3.3%, as we continue to attract more customers in the value
segment. Contract customers increased by two thousand in the quarter, to 5.1 million. Migration to our new "more data" contracts,
which have a larger data allocation, accelerated during this period, as customer demand for data continued to increase. Contract ARPU
declined by 2.0% to R393, due to a higher rollover of unused bundle allocations, as customers grow into fully utilising these larger bundles.
Voice revenue decline was low at 4.2%, reflecting the success of our personalised voice bundle strategy through our 'Just 4
You' platform, reducing the blended effective price per minute by 9.1%.
Data revenue grew 18.1% to R5.5 billion, contributing 42.2% (2017: 37.8%) of service revenue. We added 463 thousand
4G customers in the quarter, reaching a total of 5.5 million customers as devices became more affordable as a result of
improvements in exchange rates. Active smart devices on the network increased by 18.4% to 16.6 million, with the average
monthly data used on these devices increasing to 734MB per device. We have continued to introduce new initiatives to
reduce the out-of-bundle-data spend by our customers and to give customers more control, resulting in an improved
customer experience. Together with our successful data pricing strategy of making data more affordable, this has resulted in
a 56.1% increase in data bundle sales and an 18.9% reduction in the overall effective price per MB.
Enterprise continues to grow, with revenue up 9.4% to R3.3 billion, contributing 25.3% (2017: 24.4%) of service revenue. Our
fixed-line services revenue grew by 12.0%, while our cloud and hosting services delivered robust revenue growth of 27.5%.
We started the migration of customers from the mobile voice and data communications contract that we secured last year
with South Africa's national and provincial government departments. Internet of Things (IoT) revenue was up 28.9%
to R192 million.
Our capital expenditure of R1.8 billion was focused on maintaining our network lead; with widest coverage and fastest
internet, as well as enhancing our IT systems. This enables us to provide truly segmented
and personalised experiences for our customers, which is critical to delivering our strategic ambition of becoming a leading
digital company. Our continued investment in infrastructure resulted in 75.9% 4G and 99.2% 3G population coverage.
International
Underlying growth trends in our International operations have improved, with a better performance in Tanzania and
sustained growth in Mozambique and Lesotho through strong commercial execution. In the DRC economic weakness and
decoupling of the Congolese Franc from the US dollar continues to impact consumer spending. Exchange rate volatility
continues to negatively impact reported growth. Service revenue declined by 8.0% to R4.1 billion in the quarter; normalised
for currency translation effects, underlying growth was 8.0%*.
We added 281 thousand customers in the quarter, reaching 29.9 million, up 12.0%. We are continuing to improve our
customer registration processes, working closely with regulators to ensure full compliance in all our operations.
Data revenue grew by 2.2%, with normalised growth of 18.9%*, supported by an increase of 810 thousand active data
customers, up to 13.8 million. Data traffic grew 87.0%, reflecting strong demand for mobile data services as we drive the
adoption of data bundles through our 'Just 4 You' personalised offerings. We continue to ensure that our customers have
access to better low cost smart devices, especially Vodacom-branded devices, as we increase data network speeds and
improve data coverage. Data revenue comprised 27.1% (2017: 24.4%) of International operations' service revenue.
M-Pesa revenue continued to grow strongly at 7.4%, with normalised growth of 24.9%*. The new M-Pesa platform with
enhanced technology has significantly improved stability, resulting in increased trust with customers. We added 350
thousand customers in the quarter, reaching 13.3 million(1). We continue to enhance our service and product eco-systems and
develop innovative products to improve customer experience. In Tanzania, 1.0 million customers are using our successful
M-Pawa savings and loans product, developed in partnership with the Commercial Bank of Africa. There has also been a
steady uptake of our International Money Transfer (IMT) services. During the quarter, on average, R22 billion was processed
monthly through the M-Pesa system.
Capital expenditure of R510 million enabled us to continue investing in all our markets to strengthen network and service
differentiation and to support data growth and wider voice coverage. 2G and 3G sites increased 7.5% and 15.4% respectively.
1. Number of unique customers who have generated revenue related to M-Pesa in the past 90 days, of these 10.1 million
have been active in the past 30 days.
Regulatory matters
South Africa Integrated information and communication technology ICT Policy White Paper
In October 2016, the Minister of Telecommunications and Postal Services published the cabinet-approved National
Integrated ICT Policy White Paper (White Paper). The White Paper sets out a framework on how the government seeks to
provide access to modern communications infrastructure and services to facilitate the entry of new players and ensure
the meaningful participation of all citizens, including those in rural areas. Its adoption will require various amendments to
existing laws and regulations flowing from the Electronic Communications Act. The Invitation to Apply (ITA) for high demand
spectrum issued by ICASA remains subject to legal challenge from the Ministry, the outcome of which is still pending.
During May 2017, a high level agreement was reached between the Ministry and industry stakeholders that provides for:
- Not returning assigned spectrum, as originally contemplated in the White Paper;
- Licensees committing to buy a set minimum capacity from the Wholesale Open Access Network (WOAN) to ensure
its viability;
- The Ministry conducting a study to determine the appropriate quantity of high demand spectrum that will be necessary
for the WOAN to roll out a 4G/LTE network; and
- The remaining high-demand spectrum, after allocation to the WOAN, to be assigned to existing licensees through
an allocation process yet to be determined, with a possible inclusion of rural coverage obligations.
Subsequently, the Ministry appointed the Council for Scientific and Industrial Research (CSIR) to conduct a study on the
spectrum requirements for the WOAN.
Listing of Vodacom Tanzania
In June 2016, the Parliament of Tanzania introduced mandatory listing requirements, requiring licensed telecommunications
operators to list at least 25% of their authorised share capital through an initial public offering (IPO) on the Dar es Salaam
stock exchange (DSE). Vodacom Tanzania opened its initial public offer in compliance with the legislation on 9 March 2017.
Following changes to the Electronic and Postal Communications Act 2010 (EPOCA) and directives received from the Capital
Markets and Securities Authority (CMSA), Vodacom Tanzania Plc extended the offer period by three weeks from Monday 10
July 2017 to Friday 28 July 2017 with the listing expected to take place on Tuesday 15 August 2017. This extension is to
facilitate participation by international investors, following recent changes approved by Parliament allowing international
investors to participate in the IPOs of EPOCA licensees.
Safaricom
Shareholders are referred to the circular released on 19 June 2017 detailing the proposed transaction between Vodacom
Group and Vodafone. In accordance with the terms of this proposed transaction, Vodacom Group will acquire a 34.94%
indirect interest in Safaricom from Vodafone by acquiring 87.5% of the issued share capital of Vodafone Kenya. The total
purchase consideration payable by Vodacom Group for the acquisition of 87.5% of the issued share capital of Vodafone
Kenya equates to 233 459 781 shares in Vodacom issued to Vodafone. At the general meeting on 18 July 2017,
shareholders resolved to approve this transaction, which we expect to be effective on or about 1 August 2017.
Financial review
Revenue for the quarter ended
30 June 31 March 30 June Yoy % change Quarterly % change
Rm 2017 2017 2016 Reported Normalised* Reported Normalised*
South Africa 16 654 16 141 15 443 7.8 7.8 3.2 3.2
International 4 240 3 985 4 620 (8.2) 8.0 6.4 4.5
Corporate and
eliminations (209) (221) (161) (29.8) (29.8) (5.4) (5.4)
Revenue 20 685 19 905 19 902 3.9 7.7 3.9 3.5
Service revenue for the quarter ended
30 June 31 March 30 June Yoy % change Quarterly % change
Rm 2017 2017 2016 Reported Normalised* Reported Normalised*
South Africa 13 123 13 198 12 426 5.6 5.6 (0.6) (0.6)
International 4 122 3 844 4 479 (8.0) 8.0 7.2 5.3
Corporate and
eliminations (147) (167) (99) (48.5) (48.5) (12.0) (12.0)
Service revenue 17 098 16 875 16 806 1.7 5.9 1.3 0.9
Revenue for the quarter ended 30 June 2017
Yoy % Yoy % Corporate/ Yoy %
South Africa Change International Change Eliminations Group change
Mobile contract
revenue 5 889 2.6 256 (25.8) (2) 6 143 1.0
In bundle(1,2) 4 286 3.8 65 18.2 - 4 351 4.0
Out of
bundle(4) 1 603 (0.4) 191 (34.1) (2) 1 792 (5.6)
Mobile prepaid
revenue 5 536 7.5 3 112 (5.1) 1 8 649 2.6
In bundle(1,3) 1 383 16.3 371 (20.9) - 1 754 5.8
Out of
bundle(4) 4 153 4.9 2 741 (2.5) 1 6 895 1.8
Mobile customer
revenue 11 425 4.9 3 368 (7.1) (1) 14 792 1.9
Mobile
interconnect 364 (20.0) 309 (18.7) (96) 577 (27.8)
Other service
revenue 1 334 23.1 445 (6.1) (50) 1 729 15.7
Service revenue 13 123 5.6 4 122 (8.0) (147) 17 098 1.7
Equipment
revenue 3 196 17.0 77 (9.4) (25) 3 248 16.0
Non-service
revenue 335 17.5 41 (26.8) (37) 339 14.5
Revenue 16 654 7.8 4 240 (8.2) (209) 20 685 3.9
Included in service revenue
Mobile voice 5 532 (4.2) 2 147 (11.4) (1) 7 678 (6.3)
Mobile data 5 542 18.1 1 119 2.2 - 6 661 15.1
Mobile
messaging 590 (2.8) 107 (4.5) - 697 (3.1)
Notes:
1. 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.
2. Mobile in bundle revenue - Contract: Revenue from all bundles and add-ons lasting 30 days or more.
3. Mobile in bundle revenue - Prepaid: Revenue from bundles lasting seven days or more.
4. 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 30 June 2016
Corporate/
Rm South Africa International Eliminations Group
Mobile contract revenue 5 738 345 (1) 6 082
In bundle 4 129 55 - 4 184
Out of bundle 1 609 290 (1) 1 898
Mobile prepaid revenue 5 149 3 280 1 8 430
In bundle 1 189 469 - 1 658
Out of bundle 3 960 2 811 1 6 772
Mobile customer revenue 10 887 3 625 - 14 512
Mobile interconnect 455 380 (36) 799
Other service revenue 1 084 474 (63) 1 495
Service revenue 12 426 4 479 (99) 16 806
Equipment revenue 2 732 85 (17) 2 800
Non-service revenue 285 56 (45) 296
Revenue 15 443 4 620 (161) 19 902
Included in service revenue
Mobile voice 5 774 2 424 - 8 198
Mobile data 4 691 1 095 - 5 786
Mobile messaging 607 112 - 719
Key indicators
South Africa
30 June 31 March 30 June Yoy Quarterly
2017 2017 2016 % change % change
Customers(1)(thousand) 39 381 37 131 35 112 12.2 6.1
Prepaid 34 248 32 000 30 148 13.6 7.0
Contract 5 133 5 131 4 964 3.4 -
Data customers(2)(thousand) 19 167 19 549 18 054 6.2 (2.0)
Internet of Things connections(3)
(thousand) 3 100 2 979 2 515 23.3 4.1
MOU per month(4) 125 131 134 (6.7) (4.6)
Prepaid 115 122 124 (7.3) (5.7)
Contract 190 190 190 - -
Total ARPU(5) (rand per month) 103 109 109 (5.5) (5.5)
Prepaid 58 61 60 (3.3) (4.9)
Contract 393 401 401 (2.0) (2.0)
Traffic(6) (millions of minutes) 14 426 14 462 13 939 3.5 (0.2)
Outgoing 12 109 12 105 11 575 4.6 -
Incoming 2 317 2 357 2 364 (2.0) (1.7)
Notes:
1. 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. 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
30 June 31 March 30 June Yoy Quarterly
2017 2017 2016 % change % change
Customers(1) (thousand) 29 936 29 655 26 722 12.0 0.9
Tanzania 12 611 12 653 12 060 4.6 (0.3)
DRC 10 792 10 388 8 486 27.2 3.9
Mozambique 5 147 5 146 4 817 6.9 -
Lesotho 1 386 1 468 1 359 2.0 (5.6)
Data customers(2) (thousand) 13 807 12 997 10 919 26.4 6.2
Tanzania 6 767 6 463 5 440 24.4 4.7
DRC 3 982 3 705 2 885 38.0 7.5
Mozambique 2 470 2 280 2 112 17.0 8.3
Lesotho 588 549 482 22.0 7.1
M-Pesa customers(3) (thousand) 13 272 12 922 10 559 25.7 2.7
Tanzania 7 698 7 966 7 467 3.1 (3.4)
DRC 2 412 2 086 1 357 77.7 15.6
Mozambique 2 745 2 474 1 478 85.7 11.0
Lesotho 417 396 257 62.3 5.3
MOU per month(4)
Tanzania 153 146 158 (3.2) 4.8
DRC 44 44 50 (12.0) -
Mozambique 130 130 109 19.3 -
Lesotho 81 79 79 2.5 2.5
Total ARPU(5) (rand per month)
Tanzania 35 34 40 (12.5) 2.9
DRC 42 37 58 (27.6) 13.5
Mozambique 48 40 56 (14.3) 20.0
Lesotho 64 54 62 3.2 18.5
Total ARPU(5) (local currency per month)
Tanzania (TZS) 5 946 5 674 5 876 1.2 4.8
DRC (USD) 3.2 2.8 3.9 (17.9) 14.3
Mozambique (MZN) 228 209 207 10.1 9.1
Notes:
1. 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. Data customers are based on the number of unique users generating billable data traffic during the month. 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. M-Pesa customers are based on the number of unique customers who have generated revenue related to M-Pesa
during the last three months.
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 customer
during the period.
Historical financial review
Revenue
30 June 31 March 31 December 30 September 30 June 31 March 31 December
Rm 2017 2017 2016 2016 2016 2016 2015
South Africa 16 654 16 141 17 142 16 003 15 443 15 640 16 347
International 4 240 3 985 4 316 4 429 4 620 5 086 4 740
Corporate and
eliminations (209) (221) (236) (183) (161) (173) (115)
Group revenue 20 685 19 905 21 222 20 249 19 902 20 553 20 972
Revenue yoy % change for the quarter ended
Reported Normalised*
% 30 June 30 September 31 December 31 March 30 June
2017 2016 2016 2017 2017
South Africa 7.8 3.2 4.9 3.6 7.8
International (8.2) (21.6) (8.9) (0.1) 8.0
Corporate and eliminations (29.8) (27.7) (105.2) (34.6) (29.8)
Group revenue 3.9 (3.1) 1.2 2.5 7.7
Service revenue
30 June 31 March 31 December 30 September 30 June 31 March 31 December
Rm 2017 2017 2016 2016 2016 2016 2015
South Africa 13 123 13 198 13 410 13 037 12 426 12 503 12 707
International 4 122 3 844 4 206 4 246 4 479 4 903 4 581
Corporate and (147) (167) (173) (121) (99) (111) (64)
eliminations
Group service 17 098 16 875 17 443 17 162 16 806 17 295 17 224
revenue
Service revenue yoy % change for the quarter ended
Reported Normalised*
% 30 June 30 September 31 December 31 March 30 June
2017 2016 2016 2017 2017
South Africa 5.6 5.6 5.5 5.6 5.6
International (8.0) (21.6) (8.2) (2.0) 8.0
Corporate and eliminations (48.5) (50.5) (170.3) (23.5) (48.5)
Group service revenue 1.7 (2.4) 1.3 3.5 5.9
Historical key indicators
South Africa
30 June 31 March 31 December 30 September 30 June 31 March 31 December
2017 2017 2016 2016 2016 2016 2015
Customers(1) 39 381 37 131 36 375 35 685 35 112 34 178 34 103
(thousand)
Prepaid 34 248 32 000 31 188 30 641 30 148 29 265 29 206
Contract 5 133 5 131 5 187 5 044 4 964 4 913 4 897
Data 19 167 19 549 19 261 18 158 18 054 18 056 18 353
customers(2)
(thousand)
Internet 3 100 2 979 2 810 2 626 2 515 2 264 2 174
of Things
connections(3)
(thousand)
MOU per 125 131 145 136 134 134 138
month(4)
Prepaid 115 122 138 127 124 125 129
Contract 190 190 187 192 190 191 192
Total ARPU(5) 103 109 114 112 109 112 116
(rand per
month)
Prepaid 58 61 64 63 60 62 66
Contract 393 401 414 415 401 404 409
Traffic(6) 14 426 14 462 15 550 14 458 13 939 13 699 13 964
(millions of
minutes)
Outgoing 12 109 12 105 13 158 12 062 11 575 11 352 11 516
Incoming 2 317 2 357 2 392 2 396 2 364 2 347 2 448
Notes:
1. 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. 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
30 June 31 March 31 December 30 September 30 June 31 March 31 December
2017 2017 2016 2016 2016 2016 2015
Customers(1) 29 936 29 655 28 794 27 918 26 722 27 127 31 130
(thousand)
Tanzania 12 611 12 653 12 419 12 354 12 060 12 375 12 714
DRC 10 792 10 388 9 702 9 204 8 486 8 527 11 814
Mozambique 5 147 5 146 5 208 4 987 4 817 4 826 5 240
Lesotho 1 386 1 468 1 465 1 373 1 359 1 399 1 362
Data 13 807 12 997 12 620 11 965 10 919 10 055 11 231
customers(2)
(thousand)
Tanzania 6 767 6 463 6 484 6 021 5 440 5 415 5 727
DRC 3 982 3 705 3 354 3 191 2 885 1 996 2 806
Mozambique 2 470 2 280 2 196 2 236 2 112 2 112 2 178
Lesotho 588 549 586 517 482 532 520
M-Pesa 13 272 12 922 12 032 10 994 10 559 9 224 9 735
customers(3)
(thousand)
Tanzania 7 698 7 966 7 488 7 035 7 467 7 030 7 964
DRC 2 412 2 086 1 969 1 662 1 357 866 825
Mozambique 2 745 2 474 2 220 1 916 1 478 1 104 745
Lesotho 417 396 355 321 257 224 201
MOU per
month(4)
Tanzania 153 146 162 162 158 124 130
DRC 44 44 48 56 50 40 39
Mozambique 130 130 122 123 109 111 105
Lesotho 81 79 90 81 79 78 83
Total ARPU(5)
(rand per
month)
Tanzania 35 34 40 40 40 41 39
DRC 42 37 48 56 58 52 41
Mozambique 48 40 41 44 56 61 54
Lesotho 64 54 66 63 62 59 65
Total ARPU(5)
(local currency
per month)
Tanzania (TZS) 5 946 5 674 6 279 6 187 5 876 5 631 5 957
DRC (USD) 3.2 2.8 3.4 3.9 3.9 3.3 2.9
Mozambique 228 209 223 223 207 185 180
(MZN)
Notes:
1. 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. Data customers are based on the number of unique users generating billable data traffic during the month. 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. M-Pesa customers are based on the number of unique customers who have generated revenue related to M-Pesa
during the last three months.
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 customer
during the period.
Average quarterly exchange rates
30 June 31 March 30 June Yoy Quarterly
2017 2017 2016 % change % change
USD/ZAR 13.21 13.23 15.00 (11.9) (0.2)
ZAR/MZN 4.74 5.28 3.71 (27.8) 10.2
ZAR/TZS 169.33 168.63 146.11 (15.9) 0.4
EUR/ZAR 14.52 14.09 16.94 (14.3) 3.1
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 nor reported on by the Group's auditors being PriceWaterhouseCoopers Inc.
Year-on-year reconciliation
Translation
Reported(1) foreign exchange(2) Normalised*
% change ppt % change
Revenue
Group 3.9 3.8 7.7
International (8.2) 16.2 8.0
Service revenue
Group 1.7 4.2 5.9
International (8.0) 16.0 8.0
Data revenue
Group 15.1 3.2 18.3
International 2.2 16.7 18.9
M-Pesa revenue
International 7.4 17.5 24.9
Quarter-on-quarter reconciliation
Translation
Reported(3) foreign exchange(4) Normalised*
% change ppt % change
Revenue
Group 3.9 (0.4) 3.5
International 6.4 (1.9) 4.5
Service revenue
Group 1.3 (0.4) 0.9
International 7.2 (1.9) 5.3
Notes:
1. The reported percentage change relates to the quarter to date year-on-year percentage growth
between 30 June 2016 and 30 June 2017. 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 above.
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 30 June 2017 average rate (which is derived by dividing the individual
subsidiary's translated rand value with the functional currency for the quarter) to 30 June 2016 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 above.
3. The reported percentage change relates to the quarter to date quarter on quarter percentage growth
between 31 March 2017 and 30 June 2017. 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 above.
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 30 June 2017 average rate (which is derived by dividing the individual
subsidiary's translated rand value with the functional currency for the quarter) to 31 March 2017 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 above.
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 announcement which sets out the annual results for Vodacom Group Limited for the three months ended 30 June 2017,
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, but are not limited to, statements with respect to: expectations
regarding the Group's financial condition or results of operations including the confirmation of the Group's targets,
expectations for the Group's future performance generally; expectations regarding the operating environment and market
conditions and trends; intentions and expectations regarding the development, launch and expansion of products, services
and technologies; growth in customers and usage; expectations regarding spectrum licence acquisitions; expectations
regarding EBIT, capital additions, free cash flow, and foreign exchange rate movements; and expectations regarding the
integration or performance of current and future investments, associates, joint ventures, non-controlled interests and newly
acquired businesses.
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" (including in their
negative form). 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 may or may not occur in the future. There are
a number of factors that could cause actual results and developments to differ materially from those expressed or implied
by these forward-looking statements. These factors include, but are not limited to, the following: changes in economic or
political conditions in markets served by operations of the Group; greater than anticipated competitive activity; higher than
expected costs or capital expenditures; slower than expected customer growth and reduced customer retention; changes in
the spending patterns of new and existing customers; the Group's ability to expand its spectrum position or renew or obtain
necessary licences; the Group's ability to achieve cost savings; the Group's ability to execute its strategy in fibre deployment,
network expansion, new product and service roll-outs, mobile data, Enterprise and broadband; changes in foreign exchange
rates, as well as changes in interest rates; the Group's ability to realise benefits from entering into partnerships or joint
ventures and entering into service franchising and brand licensing; unfavourable consequences to the Group of making
and integrating acquisitions or disposals; changes to the regulatory framework in which the Group operates; the impact of
legal or other proceedings; loss of suppliers or disruption of supply chains; developments in the Group's financial condition,
earnings and distributable funds and other factors that the Board takes into account when determining levels of dividends;
the Group's ability to satisfy working capital and other requirements; changes in statutory tax rates or profit mix; and/or
changes in tax legislation or final resolution of open tax issues.
All subsequent written or oral forward-looking statements attributable to the Company, to any member of the Group or to
any persons acting on their behalf are expressly qualified in their entirety by the factors referred to above. No assurances
can be given that the forward-looking statements in this document will be realised. Subject to compliance with applicable
law and regulations, Vodacom does not intend to update these forward-looking statements and does not undertake any
obligation to do so.
Sponsor: UBS South Africa (Pty) Limited
ADR depository bank: Deutsche Bank Trust Company Americas
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