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Vodacom

Vodacom: SMS on the decline, 35% increase in smartphone uptake

For the first time in Vodacom’s history SMS revenue is on the decline driven, it seems, by increased use of data.

Stuart Thomas: Senior Reporter
Stuart Thomas joined the Burn Media team in 2011 while finishing off an MA in South African Literature. Eager to prove his geek credentials, he allowed himself... More

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The African mobile giant today released its interim results showing a decline in SMS between September 2011 and September 2012.

The decline comes amid significant growth in data. Vodacom says that data traffic grew by 42.5% as its average effective price per megabyte dropped by 24.2%. Then again, it can probably afford to drop those prices a little, given the rate at which people are buying data.

The mobile operator says that some 4.8-million of its South African customers are now buying data bundles. That’s helped push monthly data usage up 46.1% to 123MB. Active data customers meanwhile increased 26.8% to 13.3-million. Internationally, its active data customers grew by 128% to 4.3-million.

One factor pushing up data usage is the 35% growth in smartphone uptake on the network. Some 1.4-million smartphones have been added to the network since September 2011, bringing the total number of smartphones up to 5.3-million. There are also around 258 000 active tablets on the network.

If CEO Shameel Joosub is to be believed, that smartphone growth is just the beginning for Vodacom. He wants 65% of all devices sold on the network to be smartphones, and all of them to have a data bundle attached.

The trends are interesting given that Vodacom is South Africa’s largest mobile network. Given the price wars the country’s largest mobile players have been engaged in over the past few months, it’s likely that all of them will, at the very least, have seen increased data usage.

Interestingly voice is still growing, albeit slowly at around 1.5%. An increase in prepaid customers with once off low usage appears to have helped fuel this growth, although Vodacom seems keen to get them onto more managed voice plans.

Mobile financial services also continue to grow, with active MPesa customers almost doubling compared with the previous period to 4.2-million customers. The network’s MPesa power base is Tanzania, with the service contributing just under 13% of the company’s revenue in that country. Vodacom says it has plans to roll out similar money transfer services in the DRC, Mozambique and Lesotho in the next nine months.

That international business is becoming increasingly important. It now accounts for 20% of Vodacom’s revenue. That indicates that it’s well within the company’s interests to remain active in those markets. That may be why it’s decided against leaving the DRC where, according to Moneyweb, it has been locked in a long-standing dispute with its local partner.