Strong performance across the continent sees Vodacom profits double

• Cellco’s net profit up 49.7% on the back of a 19.6% growth in revenues
• Congolese operations more than triple customer base
• South African subscribers up 20%

Vodacom, the largest mobile operator across Africa, has reported a 49.7% hike in net profit for the six months to 30 September 2003. The cellco, which operates in South Africa, Tanzania, the Democratic Republic of Congo (DRC) and Lesotho, saw its total customer base grow to 9.6 million in the period, pushing revenues up 19.6% to ZAR11.3 billion. Net profit was ZAR1.4 billion, whilst operating margin rose two percentage points to 21.7%, despite increasing interconnection costs and a more competitive marketplace.

Vodacom’s investments in Lesotho, Tanzania and the DRC are held via its wholly-owned subsidiary Vodacom International. Vodacom Tanzania saw its subscriber base leap 76.9% to 541,285, but that was dwarfed by the 221.2% growth at Vodacom Congo, which boasted 457,707 customers at the end of September 2003.

South Africa accounts for the bulk of Vodacom’s business and at the end of the six-month period it had 8.5 million subscribers in the country, up 19.5% year-on-year. Only 1.3 million of the cellco’s South African customers are on contracts, with the bulk being pre-paid users, attracted by its aggressive marketing and low cost deals. SMS texting is growing in popularity and Vodacom South Africa reported a 39.4% in the volume of SMS traffic, to total 910 million messages in the period.

South Africa has witnessed an exceptionally rapid uptake of GSM services and is now amongst the most dynamic mobile markets outside Europe. A key factor in the growth is the popularity of pre-paid services which account for over 80% of total customers. At the end of September Vodacom estimated that it had a 55% share of the South African cellular market, some way ahead of its two rivals, MTN and Cell C. MTN has more diversified operations than the other operators, owning a satellite telecommunications company (Orbicom), a tier-1 ISP (MTN Networks), various web portals, and part of an electronic commerce company – Newbucks Holdings. It also has mobile telephony operations in Cameroon, Lesotho, Nigeria, Rwanda and Swaziland. Cell C is the youngest of the three licensed operators and plans to have about 20% of South Africa’s expected 20 million subscriber market by 2010. Cell C began operations after signing a 15-year roaming agreement with Vodacom, and planned to build a total of 2,000 base stations of its own nationwide by the end of 2003. However, problems acquiring transmission sites have caused delays and the cellco is still some way short of its target.

Source: PriMetrica's GlobalComms database