Vodacom's quarterly service revenue rises on solid Egypt growth

A branch South African mobile communications provider Vodacom in Cape Town is shown in this picture taken on 10 November 2015. Reuters/Mike Hutchings

Vodacom, majority-owned by Britain's Vodafone, said group service revenue rose to R34.6bn ($2.17bn) in the three-month period ended 31 December, compared with the year-ago period.

On a normalised basis, group service revenue jumped 13.6%, "tracking favourably against our medium-term target," Vodacom said.

"The quarter benefited from sustained growth in Egypt and our international business, including a strong performance in DRC, while South Africa delivered modest but satisfactory revenue growth against a particularly strong comparative quarter last year," Vodacom Group CEO Shameel Joosub said in a statement.

The financial services segment remained a key growth engine, accounting for a 24.7% jump in service revenue to R4.5bn, Joosub said, adding that the company's mobile money platforms, including Kenya's Safaricom, processed $500.7bn in transaction value over the last 12 months.

Including Safaricom, Vodacom surpassed 100 million financial‑services customers during the quarter.

Despite a tough consumer environment in South Africa, service revenue in the market inched 1.4% higher to R16.4bn, supported by a 2.6% rise in contract revenue.

Prepaid revenue, however, remained under pressure due to the strained consumer backdrop and promotional pricing, Joosub said.

Service revenue in Vodacom's international operations grew 12.6%, led by a 39% surge in Egypt, which now contributes 27.5% of group service revenue for the quarter.