Promotions blunted Vodacom Group revenue in its home market of South Africa in the last three months of 2018, though declines were offset by rapid gains in its international division driven by increased data usage and growth in its mobile money operation.
In a trading update, CEO Shameel Joosub (pictured) said the performance of its units outside of South Africa in its fiscal Q3 (calendar Q4) made up for the slowdown in its home market, where it had implemented a number of “generous promotions” during the period.
He added the introduction of lower-priced data bundles during 2018 had been part of an effort to “keep people in-bundle” but this had, in turn, reduced the opportunity to generate additional revenue from customers.
Vodacom also noted a drop in revenue from device sales, partly due to unfavorable foreign exchange movements.
Revenue in South Africa fell 1.3 per cent year-on-year to ZAR18 billion ($1.3 billion), on figures adjusted following a change in accounting standards.
Its international revenue increased 12.6 per cent to ZAR5.3 billion. Overall revenue for the quarter was ZAR23 billion, up 1.5 per cent year-on-year.
The company does not report profit figures in its Q3 trading updates.
Joosub attributed the performance of its international segment to “sustained revenue growth and m-Pesa’s continued success.”
He added data revenue for its operation outside of South Africa increased 25 per cent year-on-year with m-Pesa revenue up 30 per cent.
The company said it expected data and mobile money to continue to gain momentum in its international markets, while it was encouraged by pledges by authorities in South Africa to hold a 4G spectrum auction in early 2019.Subscribe to our daily newsletter