African operator group Vodacom said it had delivered “a solid performance” in the year to 31 March 2013, while acknowledging “tough competition across all our markets”.

The company identified a number of “key challenges”, including the growth of OTT and instant messaging services, access to spectrum for LTE, and pressures on consumer spending in South Africa.

It also said that it is “investigating opportunities to grow our exposure to attractive markets elsewhere in Africa.”

According to Shameel Joosub (pictured), CEO of the Vodafone-owned group, its investment of ZAR9.5 billion ($1 billion) last year has “enabled us to operate more efficiently and expand our margins despite comprehensive price reductions”.

The company has spent cash on 3G coverage expansion and network renewal projects.

In October 2012, the company launched South Africa’s first LTE network, with “just over 600 sites operational” at 31 March 2013.

In a statement, Vodacom noted that following a period of restructuring, “we have refocused the business on executing our well defined strategic priorities”.

In its home market, it is “competing hard to maintain and grow market share in a market that has reached saturation in mobile voice penetration”, with its focus on “clear differentiation through best network experience, best service, and best value”.

In international markets, where penetration rates are low and Vodacom is competing for customers and building scale, “our focus is on expanding coverage and driving penetration through network quality, distribution reach, meaningful products and competitive value”.

Noting the opportunity to target “specific growth opportunities”, including its M-Pesa mobile money services, Vodacom said that “mobile data is our single biggest growth opportunity, with smartphone and tablet penetration at low levels in all our markets”.

In its core South African business, the company said service revenue declined by 0.4 per cent to ZAR48.23 billion ($5.13 billion), noting that growth in data services and the success of new prepaid offers was offset by lower out-of-bundle usage, a reduction in calling card customers, a weaker performance of independent service providers, and continued cuts in termination rates.

In this market, its active customer base increased by 4.9 per cent year-on-year to 30.3 million.

Service revenue in the International segment increased by 11 per cent to ZAR11.26 billion, although this would have been 22.3 per cent excluding the sale of its Gateway Carrier Services businesses and impact of foreign exchange movements.

It said that International operations now contribute 19 per cent to Group service revenue, compared with 17.4 per cent in the prior year.

In this segment it has 21.3 million customers, up 12.9 per cent year-on-year.

For the year, on a group level Vodacom reported a profit of ZAR13.22 billion, up 29.6 per cent from ZAR10.2 billion, on revenue of ZAR69.92 billion, up 4.5 per cent from ZAR66.93 billion.

Service revenue increased by 1.9 per cent to ZAR59.34 billion, of which ZAR35.4 billion was mobile voice, up 3.3 per cent.

Mobile data revenue increased to 22.2 per cent to ZAR10 billion, driven by increased smartphone adoption. Active data customers increased by 22.5 per cent to 18.5 million.

It ended the period with 51.7 million customers.