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South African operator to continue with its plans for fixed broadband, despite failure of Neotel bid; posts solid full-year results.
Vodacom on Monday said it is still keen to secure additional spectrum and build its fixed broadband presence in its home market, despite the recent collapse of its planned Neotel acquisition.
The comment came alongside the publication of the South African operator group’s full-year financial results, which showed solid revenue and earnings growth.
"Looking ahead, we will continue to explore spectrum opportunities," said Vodacom chief executive Shameel Joosub, in a statement. The company said it is looking at many ways of securing access to spectrum in all its markets, and also made it clear that it is sticking to its fixed-line ambitions in South Africa.
"South Africa is falling behind on broadband rollout and access. Due to the country’s dependency on mobile data, it is key to secure access to spectrum to unlock this growth potential and fulfil the growing data demands of the population," he said.
Joosub referred to Vodacom’s failed Neotel bid, which was derailed in March by regulatory issues.
The acquisition of Neotel would have given Vodacom access to its fixed-line infrastructure. Initially the deal also included the transfer of Neotel’s mobile spectrum, but following opposition from rivals, the pair restructured the transaction to exclude it.
"Our ambitions to increase the rollout of fibre-based broadband services to homes and businesses remain," said Joosub, adding that the telco will invest heavily in resources and infrastructure.
"As was the case a year ago, we remain cautiously optimistic while being fully cognisant of the various changing regulatory and macroeconomic environments," he said.
In the year to the end of March, Vodacom reported revenues of 80.08 billion rand (€4.5 billion), an increase of 7.5% on the previous year and up by 6% at constant currency rates. Its service revenue accounted for ZAR66.76 billion of the figure, an increase of 7.4%.
EBITDA grew by 12.8% to ZAR30.35 billion, while net profit rose by 3.2% to ZAR12.91 billion.
Looking ahead, Vodacom expects revenue growth to continue, buoyed in particular by demand for mobile data, as well as an expanding enterprise services business, the Internet of Things (IoT) and other growth areas.
As such, it raised its medium-term outlook to low to mid-single-digit service revenue growth, mid to high-single-digit growth in group EBITDA, and capex of 12%-14% of revenue over the next three years.
