Vodacom SA sees 6.4 percent revenue growth from increase in data demand

Tariff reductions and remote working resulted in an increase in mobile traffic, says CFO Sitho Mdlalose.

The initial months of Covid-19’s stay in South Africa, with lockdowns and restrictions forcing people to work and learn from home, have resulted in an increasing demand for data and network coverage across the country.

“In the face of an unprecedented global pandemic, the Vodacom Group has responded rapidly to assist governments where it operates in curbing the spread of Covid-19 while also adapting to significant changes in customer demands and behaviour patterns,” says Vodacom South Africa CFO Sitho Mdlalose.

He adds that, in South Africa, the combination of increased demand for data following significant tariff reductions of up to 40 percent effect on 1 April and more people working and being educated remotely, resulted in a significant increase in mobile and fixed traffic in the first quarter.  

Because of the increasing demand for voice, data and financial services, Vodacom South Africa has seen a 6.4 percent increase in service revenue growth, while Vodacom’s international portfolio benefited significantly from a weaker rand to grow service revenue by 10.6 percent. “This resulted in a 7.6 percent increase in service revenue across the Vodacom Group, despite tougher economic trading conditions in most of our markets,” Sitho says.

In response to the increased demand, Vodacom accelerated network infrastructure spend by R500 million to R2.7 billion in the first quarterer and used the temporary assignment of spectrum by ICASA to rapidly increase network capacity The temporary assignment also enabled Vodacom to fast track the launch of South Africa’s mobile 5G network and its fixed 5G commercial service. 

“Collaboration is instrumental in defeating Covid-19 and it is for this reason we have concluded a number of innovative partnerships in recent months with particular emphasis on health, education, free public benefit services, big data analytics and financial services to support citizens and governments.”

In addition to zero-rating numerous essential service and education websites, Vodacom South Africa donated 20,000 smartphones, 100 terabytes of data and 10 million voice call minutes to the National Department of Health to collect and transmit data in real time for resource planning purposes as part of the government’s accelerated Covid-19 testing campaign.

The company also partnered with Discovery Health to offer free virtual consultations with doctors to the general public to help alleviate pressure on the country’s healthcare system by assisting in diagnosing Covid-19 as well as treating it.

More recently, Vodacom South Africa partnered with Microsoft to launch the Connected Digital Education Platform which provides participating educational institutions, from schools through to universities, with discounted data bundles and educators with the ability to deliver classes to learners where access to Microsoft Teams is provided for free.

Vodacom Financial Services has also announced a partnership with lifestyle services platform Alipay to develop an affordable payments app for both customers and merchants.