Vodacom eyes revenue from digital, financial services

JOHANNESBURG: South Africa’s Vodacom Group expects new digital and financial services to generate over a quarter of group service revenue in the medium term, its chief executive said on Monday as the telecom operator reported a rise in full year operating profit.

Vodacom, like its peer MTN Group, has been transformingitsbusinessfromjustprovidingtelecom services to building a technology company that now enables its 129.6 million customers to also lend money, make payments, shop online and control appliances at home using smartphones.

It is beting on millions of Africans that still don’t have access to financial services and on the continued growth of smartphone adoption and internet penetration on the continent.

Vodacom’s aggressive focus on new services, which include digital and financial services, fixed broadband and internet of things (IOT) - the concept of connecting household devices to the internet - supported its normalised group service revenue growth of 4.6% to 79.9 billion rand ($4.91 billion) in the year ended March 31.

Revenue from financial services, the largest component of sales of new services, jumped 14.4% to 7.6 billion rand. That growth was driven by strong adoption of Vodacom’s South African “super-app”, Vodapay - which allows users to pay for bills and shop from various online stores in the app using their smartphones - and by continued growth of its M-pesa mobile money service.

Since its launch last October, Vodapay has atracted 2.2 million downloads and 1.6 million registered users, Vodacom Group Chief Executive Shameel Joosub said in a statement.