MTR cuts weigh on Vodacom service revenue
A 50% cut in mobile termination rates (MTRs) implemented by the Independent Communications Authority of South Africa (Icasa) in April has dragged down telecommunications group Vodacom’s service revenue for the three months ended June 30.
The group on Thursday posted revenue of R18.2-billion for the quarter under review – a 4.3% increase over the corresponding period the year before.
Vodacom’s South African unit increased revenue by 1.7% to R14.8-billion on the back of a 16.9% growth in equipment revenue, which now represented 21.4% of total revenue.
The international business achieved a 17.2% rise in revenue to R3.6-billion.
The group’s overall service revenue increased 1.8% to R14.9-billion, which Vodacom CEO Shameel Joosub said was up 5%, excluding the impact of the MTR cuts.
The “dramatic” decrease in MTRs had led to a 2% contraction in Vodacom South Africa’s service revenue to R11.4-billion. Service revenue would have increased 2% if the 44% reduction in incoming voice revenue was excluded.
In April, Icasa temporarily implemented an MTR of 20c and an asymmetric rate of 44c for a six-month period until September 30.
Meanwhile, Vodacom’s international operation’s service revenue grew 17.3% to R3.5-billion, driven by continued customer growth, higher voice use, increased data use and M-Pesa.
The international segment now contributed 23.4% of group service revenue.
Group data revenue increased 23.2% to R3.6-billion, accounting for 24.1% of the generated service revenue, Joosub said in a quarterly update.
The number of active customers increased 15.6% to 59.6-million, with active data customers growing 36.7% to 25.3-million during the three months ended June 30.
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