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More Africa NewsTanzania: Voda Profit Declines 50pc As Customers Increase

May 15, 2019by myles

VODACOM Tanzania net profit has slowed down by almost 50 per cent while its customers increased almost by 10 per cent for a year ending March.

The financial statement issued yesterday showed the giant telco net profit dropped to 90.76bn/- for year ending March from 170.24bn/- of previous similar period last March.

Vodacom, listed on Dar es Salaam Stock Exchange (DSE), attributed profit decline to increased total expenses that grew by 3.5 per cent to 743bn/- including a one-off penalty.

“Our cost containment programme ‘Fit for Growth’ continues to yield strong results… [ however] was offset by greater network operating costs… ,” the telco statement showed.

The operation high costs were due to result of higher number of elements and inflation adjustment applied under service contract and high publicity costs from increased on-the ground marketing.

The telco basic earnings per share also dropped by half to 40/52 from 83/81. Its share was trading 800/- yesterday.

Despite reporting a profit slow down, the firm service revenue increased by 5.5 per cent to 1.02tri/- thanks to “impressive growth from MPesa, mobile data and messaging revenue”.

“We [have] added 1.2 million customers, a solid customer growth of 9.6 per cent reaching 14.1 million,” the statement said. Also Voda said its capital expenditure was 171.4bn/- an increase of 7.3 per cent or 16.7 per cent of revenue.

“Our investments were focused on increasing data network capacity and enhancing 4G coverage in the major cities,” Voda said.

Mobile data revenue continues with an upward trend, growing at 17.9 per cent to 167bn/- primarily driven by a 7.4 per cent increase in data customers to 7.9 million, representing 55.8 per cent of the customer base.

Data traffic grew by 34.2 per cent, with significant growth in 4G traffic, reflecting strong demand of mobile data services. “Our focus on youth and high value customer segments, coupled with partnership- led smartphone campaigns,” it said.

Also, messaging revenue increased by 31.3 per cent to 41.4bn/- with the number of SMSs transmitted declining by 11.2 per cent to 34.3 billion while price per SMS increased by 34.1 per cent.

“This is a result of the introduction of SMS-only bundles in the prior year and a significant improvement in monetising these bundles during the year,” the statement showed.

The telco said its main focus will be to leverage off the growing customers base, expand the agency network and merchant base to grow the existing M-Pesa revenue streams.

“This guidance assumes a stable currency, regulatory and macroeconomic environment,” the telco said. Voda has employed 548 permanent and 127,000 indirect employments. Out of indirect employment 106,000 are M-Pesa agents.

Read the original article on Daily News.