Vodacom earnings up just 2.8% to R8.96

Vodacom's Shameel Aziz Joosub has confirmed the mobile operator will buy Neotel for R7bn if it gets regulatory approval. Image: Vodacom

The revenue increase was driven by a 28.6% growth in equipment revenue which it said represented 20.3% of total income. Vodacom said the reduction in mobile termination rates‚ also referred to as MTRs‚ resulted in a 21.7% decline in interconnect revenue.

South Africa's largest mobile operator by subscriber numbers said there had been a significant growth in data usage.

Data revenue increased 23.6% to R10.974bn and represented 22.7% of service revenue up from 18.4% last year.

Shameel Aziz Joosub‚ Vodacom's Chief Executive said:"Demand for mobile data continues to be a key growth driver. Overall revenue grew 8.3% and we added 7m customers in the year taking our total active customer base to 57.5m."

Vodacom reported a 9.5% rise in its active prepaid customers adding 2.3m net connections‚ to 26.7m‚ which it said reflected the appeal of new price plans and micro bundles.

Joosub said Vodacom had invested R6.9bn in its network‚ adding 1‚081 new 3G sites. "Our 3G network now covers 91.9% of the population‚" he said.

The operator declared a final dividend of 430c per share. The dividend will be subject to a local dividend withholding tax rate of 15%.

Vodacom also told shareholders that it had entered into an agreement with Neotel to buy the country's second fixed-line operator for about R7bn.

Vodacom said it would fund the acquisition through available cash resources and existing credit facilities. The deal would only be concluded if it gets all regulatory approvals.