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Vodacom grows after strong network investment

Vodacom on Monday reported solid results for the year ended March 2016, with group service revenue rising 7.4 percent to R66.76 billion underpinned by improved trends in voice revenue and data revenue growth of 28.5 percent.

The South Africa’s largest mobile operator said it had spent R8.7 billion to upgrade its network infrastructure and was able to increase its domestic customer base by 2.1 million, an increase of 6.4 percent.

The Group capital expenditure of R12 875 million was mainly focused on rapidly expanding LTE/4G coverage and increasing data speeds.

Vodacom Group chief executive, Shameel Joosub, said he was very pleased with the company’s performance this year, with strong execution of its strategy delivering solid results.

“The acceleration in network investment over the past two years is a true success story of effective capital investment to ensure growth in revenue and customers. The demand for data continues to be our key driver,” Joosub said in a statement.

“Overall revenue grew 7.5 percent with a slight decline in customers to 61.3 million, as a result of customer registration requirements in our International operations.

“In South Africa, our network superiority has played a significant part in offering better value to our 34.2 million customers, 2.1 million up from last year. We spent R8.7 billion to upgrade our network infrastructure which includes more than doubling our LTE/4G sites to over 6,000,” Joosub said.

The proposed acquisition of Neotel by Vodacom lapsed in March due to regulatory complexities and certain conditions not being fulfilled.

Joosub said Vodacom’s ambitions to increase the roll-out of fibre-based broadband services to homes and businesses remained intact.

“Looking ahead, we will continue to explore spectrum opportunities. South Africa is falling behind on broadband roll out and access. Due to the country’s dependency on mobile data, it is key to secure access to spectrum to unlock this growth potential and fulfill the growing data demands of the population,” Joosub said.

Group operating profit increased 9.5 percent to R21 billion mainly due to EBITDA growth while headline earnings per share were up 2.7 percent to 883 cents per share, Vodacom said.

Data revenue contributed 31.9 percent of Group service revenue compared to 26.7 percent a year ago.

– African News Agency (ANA)

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