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VODACOM GROUP LIMITED - Voluntary announcement Competition Commission data pricing enquiry

Release Date: 10/03/2020 11:14
Code(s): VOD     PDF:  
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Voluntary announcement – Competition Commission data pricing enquiry

Vodacom Group Limited
(Incorporated in the Republic of South Africa)
(Registration number 1993/005461/06)
Share code VOD             ISIN ZAE000132577
ADR code VDMCY             ISIN US9258D2009
(“Vodacom Group” or “the company”)


Voluntary announcement – Competition Commission data pricing enquiry

Shareholders are advised that Vodacom Group has reached an agreement with the Competition Commission
and has issued the following media statement outlining details of the agreement reached:


R2.7 billion boost for customers as Vodacom cuts data prices, launches free data service
On 1 April 2020, Vodacom South Africa will introduce a range of initiatives that will result in R2.7 billion in
additional savings for customers. This forms part of a broader Vodacom Group programme to create a Social
Contract with its stakeholders that will address pressing societal challenges in each of the markets in which it
operates.

Commenting on the latest Competition Commission announcement, Vodacom Group CEO Shameel Joosub,
said: “Following the release of the Competition Commission’s Final Data Market Inquiry Report in December last
year, Vodacom decided to engage constructively with the Commission on the issues arising from the report. The
agreement struck with the Commission provides us with an opportunity to enter into a Social Contract with the
regulators, our customers and the people of South Africa to bring down the cost to communicate and promote
digital inclusion. In terms of the agreement, and following confirmation by the Tribunal, Vodacom will introduce
price reductions across all its monthly bundles and provide free access to basic internet, essential services and
cheaper pricing to the poorest communities. This will promote greater digital inclusion and assist with societal
problems in education and unemployment."

Over the past three years, Vodacom has made significant progress in reducing the cost to communicate and
making data more accessible, particularly for poorer consumers and communities. For example, in 2019, we
announced substantial cuts in out-of-bundle tariffs and introduced hourly, daily and weekly bundles with much
lower effective prices to drive affordability in addition to overall reductions in bundle prices. These measures
contributed to R2 billion in savings for customers and the circa 50% reduction in effective data prices in the past
two years.

In line with our purpose of connecting people to a better future, education has been and remains integral to
Vodacom in driving digital inclusion. To this end, Vodacom has already connected over 3000 schools and, in
partnership with the Department of Basic education, runs 92 teacher training centres and 10 youth centres.
Vodacom also provides free access to the portals of most of the country’s public universities.
“Having heard the concerns raised by the Competition Commission, we proactively entered into a Social Contract
with government and the public. We did this at a time when South African consumers are under increasing
financial pressure and on the understanding that action will be taken by ICASA and Government to auction high
demand spectrum. Delays in assigning spectrum and completing the digital migration has curbed the pace at
which data prices could have fallen,” adds Shameel.

The data price cuts and free data services that Vodacom will introduce on 1 April 2020 includes:

    •   Accelerating our data pricing transformation on our 30-day bundles by reducing prices by up to 40%.
        Notably, 1GB of data valid for 30 days – often referred to as the “headline price” - will reduce by 34%
        from R149 to R99 on all channels. Discounts will be provided on all 30-day bundles while further
        decreases will be effected on 1 April 2021.

    •   With regard to access to free data services, we will be consolidating all existing zero-rated data services
        with new essential services aimed at social upliftment into a single platform called “Connect U”. This
        social platform will provide Vodacom customers with:
             o    Free access to job portals, where youth can search for employment and upload their CVs.
             o    Free educational content like our e-School platform which provides CAPS curriculum aligned
                  content from Grades R – 12.
             o    Free Health and wellness information through our Mum & Baby platform focused on equipping
                  mothers and caregivers with advice on pregnancy, neonatal and childcare through SMS,
                  educational articles, tutorials, videos and other tools.
             o    Free access to Facebook Flex, the low data alternative to Facebook that enables customers to
                  stay socially connected.
             o    Access to two free SMS’s per day to customers, provided they have made a purchase in the
                  past month and they can access these on the new portal.
             o    Extending further discounted bundle offers to pre-paid customers in areas where the majority
                  of people living beneath the food poverty line. This will benefit more than 2000 suburbs and
                  villages, ensuring that this benefits people that really need it most.
             o    Zero-rated access to select government sites to assist members of the public in accessing
                  government services such as Home Affairs, Ambulance Services, Education sites and
                  Government Communication Services. This will assist everyone in gaining access to much
                  needed government services as these are now moving into the digital space as well.
             o    Expanding our zero-rated offering to all schools, universities and T-Vet colleges across the
                  country. This will ensure that learners and students enrolled into these institutions will be able
                  to access relevant information for free via their portals.
             o    A full zero-rated internet search function powered by Wikipedia. This will allow customers
                  access to the entire Wikipedia database of knowledge free of charge.
             o    Free access to other essential information such as local and international headlines, trends
                  and the weather.

“We believe these commitments, as part of our social contract, will go a long way in assisting customers in these
tough economic times and driving digital inclusion for all,” concludes Shameel.

Vodacom Group CEO, Shameel Joosub, will host a conference call at 16:00 (SA time), 14:00 (London time) and
9:00 (New York time) on Tuesday 10 March 2020 to discuss the agreement reached between the Competition
Commission and Vodacom. For conference call details please email vodacomir@vodacom.co.za.


Midrand
10 March 2020
Sponsor: UBS South Africa (Pty) Limited

Date: 10-03-2020 11:14:00
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