A good call

Finweek English Edition - - MARKETPLACE - Ed­i­to­rial@fin­week.co.za

Price wars and sub­scriber com­pe­ti­tion are chal­lenges of the past for mo­bile op­er­a­tors in South Africa. With prices plateau­ing, the qual­ity, avail­abil­ity and speed of net­work has be­come a more press­ing mat­ter. Ac­cord­ing to MyBroad­band, Vo­da­com cur­rently has the best voice and data net­work in SA, based on net­work cov­er­age, call qual­ity and mo­bile data net­work per­for­mance.

The group re­ported strong growth in data rev­enue, which was up 33.5% in the six months to end Septem­ber, with data users in­creas­ing to 28.3m across the group.

In SA, LTE/4G cov­er­age has in­creased from 32.2% to 46.8% of the coun­try, CEO Shameel Joosub said at the re­lease of the group’s re­sults on 9 Novem­ber.

“Our LTE/4G cus­tomers in SA, now ap­proach­ing 2m, con­sume al­most three times more data as com­pared with 3G cus­tomers,” Joosub said. Over­all, Vo­da­com man­aged to in­crease group rev­enue by 6.4% to R39.96bn in the in­terim pe­riod, while head­line earn­ings per share in­creased 6% to 440c. Out­side SA, Vo­da­com has op­er­a­tions in Le­sotho, Mozam­bique, Tan­za­nia and the Demo­cratic Repub­lic of Congo.

Vo­da­com is fo­cused on in­vest­ing more into fi­bre and other new growth ar­eas in the sec­ond half of the fi­nan­cial year. Data will be a big fo­cus area, with only 66% of its monthly ac­tive South African cus­tomers cur­rently us­ing data, Joosub said.

The group also sees op­por­tu­nity to grow its mar­ket share in the fixed ser­vices busi­ness. Its pro­posed pur­chase of Neo­tel, which is await­ing ap­proval from the Com­pe­ti­tion Tri­bunal, will en­hance its abil­ity to pro­vide fixed­line ser­vices, broad­band and fi­bre to cus­tomers in SA, he said.

The com­pany con­tin­ues to out­per­form MTN this year - Vo­da­com shares are up 17.8% over the past year, com­pared with MTN’s de­cline of 31.1%, ac­cord­ing to INET BFA data. On a per­for­mance ba­sis, in­vestors’ bets are placed on Vo­da­com.

Up­side above 15 200c/share presents a good buy­ing op­por­tu­nity, which should ex­tend the cur­rent up­trend to the 16 875c/ share tar­get in the near to short term (one month). The sec­ondary tar­get is sit­u­ated at 18 155c/share.

Shameel Joosub CEO of Vo­da­com Group

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