Wrap Text
Vodacom Group Limited trading update for the quarter ended 31 December 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 31 December 2017
31 January 2018
Salient features
- Group revenue up 6.7% to R22.6 billion and service revenue up 5.5% to R18.4 billion
- We added 2.5 million Group active customers during the quarter, 1.6 million in South Africa and 0.9 million in our International
operations, to now reach 73.6 million active customers across the Group, up 13.0% year on year
- Group data revenue1 increased 9.7% to R6.6 billion, International data revenue up 19.5%
- South Africa service revenue grew 4.9% to R14.1 billion, supported by strong customer gains and data revenue growth
- International service revenue increased 8.7% (+8.1%*) to R4.6 billion; a third consecutive quarter of accelerating growth
Quarter ended Yoy % change
31 December
Rm 2017 Reported Normalised*
Group revenue 22 647 6.7 6.6
South Africa 18 211 6.2 6.2
International 4 719 9.3 8.8
Group service revenue 18 402 5.5 5.3
South Africa 14 061 4.9 4.9
International 4 574 8.7 8.1
Shameel Joosub, Vodacom Group CEO commented:
Our strategy of sustained investment into our network and improving customer experience has delivered solid gains in customer
numbers in South Africa, and driven growth in our International operations, resulting in stronger growth in Group revenue of 6.7%.
In South Africa, our customer base grew 14.4% to 41.6 million, contributing to the 6.2% increase in revenue, underpinned by a resilient
pre-paid voice market and a highly successful summer campaign.
During the quarter we delivered on our promise to reduce out-of-bundle data prices, evidence of our commitment to reduce the cost-
to-communicate through our pricing transformation journey; this resulted in a 24.2% decline in effective data prices for the year. In
order to compensate for the expected shortfall in revenue, we have undertaken a range of initiatives to stimulate usage. Monthly trends
towards the end of the quarter show that this is having the desired effect.
Driven by strong customer growth, a solid performance from M-Pesa and sustained demand for data, our International operations
continue to gain momentum. Data revenue grew 19.5%, supported by our strategy to increase smartphone penetration through
improved device affordability. Further new services contributed to a 33.3% jump in revenue from the M-Pesa mobile money platform.
Growth was further supported by an 11% increase in customers, resulting in revenue from International increasing by 9.3%, a third
consecutive quarter of accelerating growth.
On the regulatory front in South Africa, we will be submitting a detailed response to the Department of Telecommunications and
Postal Services (DTPS) regarding its proposed amendments to the Electronic Communications Act. We remain of the opinion that a
hybrid between what is currently in place and the proposed Wholesale Open Access Network (WOAN) addresses the government's
transformation mandate and will have a greater impact on driving down the cost to communicate for customers compared with the
proposed amendments to the Electronic Communications Act (ECA).
* 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 2017 compared to the quarter
ended 31 December 2016, unless stated otherwise.
Results for Vodacom's associate investment in Safaricom are disclosed on a bi-annual basis and therefore are not included in this
quarterly update.
The quarterly information has not been audited or reviewed by Vodacom's external auditors.
(1) Mobile data revenue and M-Pesa revenue were previously reported in aggregate. These items are now separately disclosed.
Operating review
South Africa
Service revenue increased 4.9% to R14.1 billion, supported by gains in prepaid customers and strong growth in other service revenues.
We continued to see strong customer growth, adding 1.6 million customers in the quarter as we attracted new customers through our
bundle and segmentation strategy. We added 1.5 million prepaid customers during the quarter, with prepaid active customers up 16.3%
year on year. The increased customer base has supported prepaid customer revenue growth of 6.8%. Contract customers increased by
81k, which was strong despite slower sign-up of new departments as part of the government tender that we won in September 2016.
Contract ARPU declined 5.1% to R393, an improvement in the trend from Q2. This improvement reflects the rebalancing of contract
deals, by reducing discounts on subscriptions. This was partly offset by higher roll over of unused data bundles as we continue with the
migration of customers to 'more data' contracts, as well as the revenue effects from the reduction of out-of-bundle data rates.
Data revenue grew by 8.7% (Q2: 12.2%) to R6.0 billion, contributing 42.3% of service revenue. Data customer growth of 6.4% was
strong, adding 598k customers in the quarter. Data traffic growth remains robust at 43.9%, slightly down from the previous quarter as
a result of commercial steps taken to reduce free data usage, following the end of promotional offers during the quarter. Our bundle
strategy continues to deliver growth with in-bundle data revenue growth trends improving, supported by growth in bundle sales of
53.8%. In a continued effort to improve customer experience and exposure to out-of-bundle data revenues, we reduced out-of-bundle
data prices by as much as 50% from 1 October 2017. The slowdown in data revenue growth in Q3 was driven by these lower out-
of-bundle data revenues, reflecting the reduction in these rates, as well as continuous improvement in moving customers to more
affordable bundles aligned with customer usage. We note an improvement in the in-quarter growth trend, with December growth
recovering to >13% providing evidence that elasticity is returning, supported by commercial actions such as price adjustments on data
bundles. Overall effective price per megabyte was down 24.5%.
Enterprise service revenue grew 9.7% now contributing 25.5% of service revenue, supported by increases in wholesale revenue and
fixed service revenue. Fixed service revenue growth was strong at 23.6%, driven by connectivity revenue and cloud and hosting services.
We continue to invest heavily into communication infrastructure in South Africa, both to increase the reach of our data and voice services
and also to service the growing demand for data. During this quarter, our capital expenditure of R2.3 billion was focused on maintaining our
best network advantage, as well as enhancing our IT systems and deep learning machine capabilities. Our market leading network has now reached
77.6% 4G population coverage, while 3G covers 99.4% of the population.
International
Service revenue increased by 8.7% (+8.1%*) to R4.6 billion in the quarter, a third consecutive quarter of accelerating growth. This was
underpinned by strong growth in both data and M-Pesa revenue.
Growth trends in our International operations continued to improve in the quarter. Tanzania continues to deliver on its turnaround
strategy with good revenue and customer growth while we continued our efforts to improve customer registration processes.
Mozambique and Lesotho have made solid progress on their strategic priorities of M-Pesa and data growth, delivering excellent
momentum, while performance in the DRC has improved as the currency and economic environment starts to stabilise.
We added 920k customers in the three months, up 11.2% to 32.0 million, supported by good customer growth both in the DRC and
Mozambique.
Data revenue grew by 19.5%, supported by an increase of 1.3 million data customers in the quarter, to 16.0 million (+26.9%).
Delivery on our device strategy of providing customers with access to better low-cost smart devices, has enabled higher smartphone
penetration, resulting in increased data demand. We continue to focus on improving data monetisation in all markets as demand grows
rapidly.
M-Pesa revenue continued to accelerate at 33.3% to R653 million, contributing 14.3% of service revenue. We added 414 000 customers
in the quarter, reaching 14.4 million, with customers benefitting from the new M-Pesa platform that enables us to offer services
more seamlessly. We continue to grow the number of products on the M-Pesa platform, focusing on growing the merchant payment
system in Tanzania, as well as adding new services in all other markets such as bulk payments, which has helped fuel the increase in
transactions processed through the system. On average, 146 billion transactions were processed monthly through the M-Pesa system.
Capital expenditure of R630 million enabled us to continue strengthening our network and provide service differentiation to support
wider voice coverage and meet the growing data demand by improving data network speeds and expanding data coverage. As part of our
digital transformation, we continue to invest in enhancing our IT systems to support our personalised pricing offers and to deliver
on our segmentation strategy.
Safaricom
Results for Vodacom's associate investment in Safaricom are disclosed on a bi-annual basis and therefore are not included in this
quarterly update.
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. On
17 November 2017, the DTPS gazetted amendments to the ECA, the first step to give effect to the White Paper. Disappointingly,
the amendments do not fully reflect proposals previously submitted by the industry. Affected parties and other role players have
been granted an extension for comment as part of a public participation process. These inputs need to be submitted to the DTPS by
31 January 2018. The ministry will consider all submissions before submitting a revised bill to cabinet for approval to be tabled in
parliament for further consultation and debate.
ICASA's intention to amend End-user and Subscriber Service Charter Regulations
On 2 August 2017, ICASA announced that it intends to review regulations on data billing and expiry period for data bundles. On 17
November 2017, ICASA published a second notice in which they proposed amendments to the End-user and Subscriber Service
Charter Regulations in relation to data expiry rules and also out-of-bundle billing. The Group submitted its response to the intended
amendments on 3 January 2018. Public hearings are due to follow in February 2018.
ICASA priority market review
ICASA indicated that it will undertake a study to identify priority markets susceptible to ex ante regulations. Notice of intention to
conduct an inquiry to identify priority markets was published by ICASA in terms of section 4B of the ICASA Act on 30 June 2017. It is
our understanding that ICASA intends to finalise the inquiry on or before 31 March 2018. We will be fully cooperating with ICASA in this
regard.
Competition Commission investigation into complaint on the National Treasury government transversal contract for mobile
communication services
On 14 March 2016, National Treasury issued a tender for the supply and delivery of mobile communication services to national and
provincial government departments for the period 15 September 2016 to 31 August 2020. Vodacom was selected as the preferred
supplier on a non-exclusive basis after the other bidders were eliminated at different phases of the well-governed, multi-tier bidding
process. The Competition Commission has launched an investigation into the aforementioned, under sections 8(c) and 8(d)(i) of the
Competition Act.
Financial review
Revenue for the quarter ended
31 December 30 September 31 December Yoy % change Quarterly % change
Rm 2017 2017 2016 Reported Normalised* Reported Normalised*
South Africa 18 211 17 227 17 142 6.2 6.2 5.7 5.7
International 4 719 4 334 4 316 9.3 8.8 8.9 5.8
Corporate and eliminations (283) (251) (236) (19.9) (19.9) (12.7) (12.7)
Revenue 22 647 21 310 21 222 6.7 6.6 6.3 5.7
Service revenue for the quarter ended
31 December 30 September 31 December Yoy % change Quarterly % change
Rm 2017 2017 2016 Reported Normalised* Reported Normalised*
South Africa 14 061 13 547 13 410 4.9 4.9 3.8 3.8
International 4 574 4 186 4 206 8.7 8.1 9.3 6.2
Corporate and eliminations (233) (177) (173) (34.7) (34.7) (31.6) (31.6)
Service revenue 18 402 17 556 17 443 5.5 5.3 4.8 4.1
Revenue for the quarter ended 31 December 2017
Yoy % Yoy % Corporate/ Yoy %
Rm South Africa change International change Eliminations Group change
Mobile contract revenue 5 946 (2.5) 292 31.5 3 6 241 (1.2)
Mobile prepaid revenue 6 041 6.8 3 482 10.6 (1) 9 522 8.1
Customer service revenue 11 987 2.0 3 774 11.9 2 15 763 4.2
Mobile interconnect 519 10.4 358 (4.0) (151) 726 (2.0)
Fixed service revenue 670 65.4 404 (3.3) (77) 997 31.4
Other service revenue 885 13.2 38 (11.6) (7) 916 11.8
Service revenue 14 061 4.9 4 574 8.7 (233) 18 402 5.5
Equipment revenue 3 554 2.6 93 31.0 (4) 3 643 3.6
Non-service revenue 596 123.2 52 33.3 (46) 602 128.9
Revenue 18 211 6.2 4 719 9.3 (283) 22 647 6.7
Included in service revenue
Mobile voice 5 688 (3.5) 2 321 4.7 2 8 011 (1.2)
Mobile data (excl M-pesa)(1) 5 950 8.7 680 19.5 (1) 6 629 9.7
Mobile messaging 549 (14.5) 128 25.5 - 677 (9.0)
M-Pesa revenue(1) - - 653 33.3 - 653 33.3
Notes:
1. Mobile data revenue and M-Pesa revenue was previously reported in aggregate. These items are now separately disclosed.
Revenue for the quarter ended 31 December 2016
Corporate/
Rm South Africa International Eliminations Group
Mobile contract revenue 6 097 222 - 6 319
Mobile prepaid revenue 5 656 3 148 2 8 806
Customer service revenue 11 753 3 372 (1) 15 124
Mobile interconnect 470 373 (102) 741
Fixed service revenue 405 418 (64) 759
Other service revenue 782 (43) (6) 819
Service revenue 13 410 4 206 (173) 17 443
Equipment revenue 3 465 71 (20) 3 516
Non-service revenue 267 39 (43) 263
Revenue 17 142 4 316 (236) 21 222
Included in service revenue
Mobile voice 5 892 2 216 (2) 8 106
Mobile data (excl M-Pesa)(1) 5 473 569 - 6 043
Mobile messaging 642 102 - 744
M-Pesa revenue1 - 490 - 490
Note:
1. Mobile data revenue and M-Pesa revenue was previously reported in aggregate. These items are now separately disclosed.
Key indicators
South Africa
31 December 30 September 31 December Yoy Quarterly
2017 2017 2016 % change % change
Customers(1) (thousand) 41 602 40 000 36 375 14.4 4.0
Prepaid 36 283 34 762 31 188 16.3 4.4
Contract 5 319 5 238 5 187 2.5 1.5
Data customers(2) (thousand) 20 503 19 905 19 261 6.4 3.0
Internet of Things connections(3) (thousand) 3 495 3 271 2 810 24.4 6.8
MOU per month(4) 131 128 145 (9.7) 2.3
Prepaid 120 118 138 (13.0) 1.7
Contract 202 199 187 8.0 1.5
Total ARPU(5) (rand per month) 102 101 114 (10.5) 1.0
Prepaid 59 58 64 (7.8) 1.7
Contract 393 391 414 (5.1) 0.5
Traffic(6)(millions of minutes) 16 013 15 331 15 550 3.0 4.4
Outgoing 13 612 12 976 13 158 3.5 4.9
Incoming 2 401 2 355 2 392 0.4 2.0
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 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. ARPU is calculated by dividing the average monthly customer service revenue and mobile interconnect revenue by the average
monthly active customers during the period.
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
2017 2017 2016 % change % change
Customers(1) (thousand) 32 012 31 092 28 794 11.2 3.0
Tanzania 12 901 12 857 12 419 3.9 0.3
DRC 11 982 11 453 9 702 23.5 4.6
Mozambique 5 712 5 421 5 208 9.7 5.4
Lesotho 1 417 1 361 1 465 (3.3) 4.1
Data customers(2) (thousand) 16 013 14 755 12 620 26.9 8.5
Tanzania 7 317 7 072 6 484 12.8 3.5
DRC 4 470 4 175 3 354 33.3 7.1
Mozambique 3 501 2 904 2 196 59.4 20.6
Lesotho 725 604 586 23.7 20.0
M-Pesa customers(3) (thousand) 14 400 13 986 12 032 19.7 3.0
Tanzania 8 086 7 929 7 488 8.0 2.0
DRC 2 486 2 542 1 969 26.3 (2.2)
Mozambique 3 386 3 034 2 220 52.5 11.6
Lesotho 442 481 355 24.5 (8.1)
MOU per month(4)
Tanzania 171 167 162 5.6 2.4
DRC 36 42 48 (25.0) (14.3)
Mozambique 152 144 122 24.6 5.6
Lesotho 92 86 90 2.2 7.0
Total ARPU(5) (rand per month)
Tanzania 39 37 40 (2.5) 5.4
DRC 39 37 48 (18.8) 5.4
Mozambique 57 53 41 39.0 7.5
Lesotho 77 69 66 16.7 11.6
Total ARPU(5) (local currency per month)
Tanzania (TZS) 6 369 6 295 6 279 1.4 1.2
DRC (USD) 2.9 2.8 3.4 (14.7) 3.6
Mozambique (MZN) 253 244 223 13.5 3.7
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 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. ARPU is calculated by dividing the average monthly customer service revenue and mobile interconnect revenue by the average
monthly active customer during the period.
Historical financial review
Revenue
31 December 30 September 30 June 31 March 31 December 30 September 30 June
Rm 2017 2017 2017 2017 2016 2016 2016
South Africa 18 211 17 227 16 654 16 141 17 142 16 003 15 443
International 4 719 4 334 4 240 3 985 4 316 4 429 4 620
Corporate and
eliminations (283) (251) (209) (221) (236) (183) (161)
Revenue 22 647 21 310 20 685 19 905 21 222 20 249 19 902
Revenue yoy % change for the quarter ended
Reported Normalised
31 December 30 September 30 June 31 March 31 December
% 2017 2017 2017 2017 2017
South Africa 6.2 7.6 7.8 3.2 6.2
International 9.3 (2.1) (8.2) (21.6) 8.7
Corporate and eliminations (19.9) (37.2) (29.8) (27.7) (19.9)
Revenue 6.7 5.2 3.9 (3.2) 6.6
Service revenue
31 December 30 September 30 June 31 March 31 December 30 September 30 June
Rm 2017 2017 2017 2017 2016 2016 2016
South Africa 14 061 13 547 13 123 13 198 13 410 13 037 12 426
International 4 574 4 186 4 122 3 844 4 206 4 246 4 479
Corporate
and eliminations (233) (177) (147) (167) (173) (121) (99)
Service revenue 18 402 17 556 17 098 16 875 17 443 17 162 16 806
Service revenue yoy % change for the quarter ended
Reported Normalised
31 December 30 September 30 June 31 March 31 December
% 2017 2017 2017 2017 2017
South Africa 4.9 3.9 5.6 5.6 4.9
International 8.7 (1.4) (8.0) (21.6) 8.1
Corporate and eliminations (34.7) (46.3) (48.5) (50.5) (34.7)
Service revenue 5.5 2.3 1.7 (2.4) 5.4
Historical key indicators
South Africa
31 December 30 September 30 June 31 March 31 December 30 September 30 June
2017 2017 2017 2017 2016 2016 2016
Customers(1)
(thousand) 41 602 40 000 39 381 37 131 36 375 35 685 35 112
Prepaid 36 283 34 762 34 248 32 000 31 188 30 641 30 148
Contract 5 319 5 238 5 133 5 131 5 187 5 044 4 964
Data customers(2)
(thousand) 20 503 19 905 19 167 19 549 19 261 18 158 18 054
Internet of Things
connections(3)
(thousand) 3 495 3 271 3 100 2 979 2 810 2 626 2 515
MOU per month(4) 131 128 125 131 145 136 134
Prepaid 120 118 115 122 138 127 124
Contract 202 199 190 190 187 192 190
Total ARPU(5) (rand
per month) 102 101 103 109 114 112 109
Prepaid 59 58 58 61 64 63 60
Contract 393 391 393 401 414 415 401
Traffic(6) (millions of
minutes) 16 013 15 331 14 426 14 462 15 550 14 458 13 939
Outgoing 13 612 12 976 12 109 12 105 13 158 12 062 11 575
Incoming 2 401 2 355 2 317 2 357 2 392 2 396 2 364
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 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. ARPU is calculated by dividing the average monthly customer service revenue and mobile interconnect revenue during the period by
the average monthly active 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
2017 2017 2017 2017 2016 2016 2016
Customers(1) (thousand) 32 012 31 092 29 936 29 655 28 794 27 918 26 722
Tanzania 12 901 12 857 12 611 12 653 12 419 12 354 12 060
DRC 11 982 11 453 10 792 10 388 9 702 9 204 8 486
Mozambique 5 712 5 421 5 147 5 146 5 208 4 987 4 817
Lesotho 1 417 1 361 1 386 1 468 1 465 1 373 1 359
Data customers(2)
(thousand) 16 013 14 755 13 807 12 997 12 620 11 965 10 919
Tanzania 7 317 7 072 6 767 6 463 6 484 6 021 5 440
DRC 4 470 4 175 3 982 3 705 3 354 3 191 2 885
Mozambique 3 501 2 904 2 470 2 280 2 196 2 236 2 112
Lesotho 725 604 588 549 586 517 482
M-Pesa customers(3)
(thousand) 14 400 13 986 13 272 12 922 12 032 10 934 10 559
Tanzania 8 086 7 929 7 698 7 966 7 488 7 035 7 467
DRC 2 486 2 542 2 412 2 086 1 969 1 662 1 357
Mozambique 3 386 3 034 2 745 2 474 2 220 1 916 1 478
Lesotho 442 481 417 396 355 321 257
MOU per month(4)
Tanzania 171 167 153 146 162 162 158
DRC 36 42 44 44 48 56 50
Mozambique 152 144 130 130 122 123 109
Lesotho 92 86 81 79 90 81 79
Total ARPU(5)(rand per
month)
Tanzania 39 37 35 34 40 40 40
DRC 39 37 42 37 48 56 58
Mozambique 57 53 48 40 41 44 56
Lesotho 77 69 64 54 66 63 62
Total ARPU(5) (local
currency per month)
Tanzania (TZS) 6 369 6 295 5 946 5 674 6 279 6 187 5 876
DRC (USD) 2.9 2.8 3.2 2.8 3.4 3.9 3.9
Mozambique (MZN) 253 244 228 209 223 223 207
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 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. 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. ARPU is calculated by dividing the average monthly customer service revenue and mobile interconnect revenue during the period by
the average monthly active 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
Reported(1) exchange(2) Normalised
% change ppt % change
Revenue
Group 6.7 (0.1) 6.6
International 9.3 (0.5) 8.8
Service revenue
Group 5.5 (0.2) 5.3
International 8.7 (0.6) 8.1
Quarter-on-quarter reconciliation
Translation
foreign
Reported(3) exchange(4) Normalised
% change ppt % change
Revenue
Group 6.3 (0.6) 5.7
International 8.9 (3.1) 5.8
Service revenue
Group 4.8 (0.7) 4.1
International 9.3 (3.1) 6.2
Notes:
1. The reported percentage change relates to the quarter to date year-on-year percentage growth between the quarter ended
31 December 2016 and the quarter ended 31 December 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 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 ended 31 December
2017 average rate (which is derived by dividing the individual subsidiary's translated rand value with the functional currency for the
quarter) to the quarter ended 31 December 2016 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 2017
and 31 December 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 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 2017
average rate (which is derived by dividing the individual subsidiary's translated rand value with the functional currency for the
quarter) to 30 September 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 below.
Average quarterly exchange rates
31 December 30 September 31 December Yoy Quarterly
2017 2017 2016 % change % change
USD/ZAR 13.61 13.20 13.90 2.1 (3.1)
ZAR/MZN 4.45 4.63 5.41 (17.7) (3.9)
ZAR/TZS 164.41 169.75 157.01 4.9 (3.0)
EUR/ZAR 16.03 15.50 14.99 (7.0) (3.5)
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 update which sets out the quarterly results for Vodacom Group Limited for the three months ended 31 December 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 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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