Vodacom South Africa posted a 4.7 percent increase in service revenue to ZAR 23.5 billion. Equipment sales were particularly strong, growing 20.3 percent, contributing to overall revenue growth of 6.7 percent. Gross connections increased sharply to approximately 8.0 million, with the brand refresh and numerous promotions and handset deals the primary drivers of the 56.5 percent change. Customers increased 21.1 percent year on year to 28.9 million, a net increase of 2.4 million in the six-month period. This was achieved despite the disconnection of 537,000 SIMs that were locked at the RICA deadline. Churn also increased in the second quarter as a result of these RICA disconnections. Total ARPU was down 9.0 percent to ZAR 141, largely due to lower interconnect rates and the higher prevalence of lower usage customers in the mix. Data revenue increased 29.4 percent to ZAR 3.7 billion, and active data customers grew 32.3 percent to 10.5 million, representing 36.2 percent of customers. Customers regularly purchasing data bundles grew by 89.7 percent to 3.5 million. EBITDA increased 6.6 percent, with the EBITDA margin maintained at 35.9 percent. Capital expenditure increased 83.4 percent to ZAR 3.0 million (11.0% of revenue) as the firm made substantial investments to increase capacity and enhance quality.
The company said the positive momentum in the international mobile network operations continued, with service revenue in local currency increasing 20 percent. Total revenues from international rose 13.3 percent to ZAR 4.4 billion due to strong growth in customers and relatively stable macro environments. Customers increased 22.5 percent year-on-year to 19.0 million, adding 2.0 million in the six months. Take up of the M-Pesa service in Tanzania accelerated, with active customers reaching 2.2 million, penetrating 21.0 percent of the customer base. Despite the cost pressures from fuel and foreign-denominated operational costs, international EBITDA increased by 12.4 percent to ZAR 660 million, and the EBITDA margin was stable at 14.6 percent. The international operating profit was negatively impacted by impairment losses of ZAR 318 million, mainly for a weak performance at the business unit Gateway.
