Vodacom wants high-demand spectrum
AS VODACOM data revenue in South Africa overtook voice revenue for the first time in the six months September 30, the listed telecoms group yesterday pushed the government for the allocation of high-demand spectrum to drive down underlying costs.
Vodacom and its peers have blamed the lack of spectrum for high expenditure costs as well as difficulty in expanding their networks in rural areas. According to the companies, the release of the spectrum would cut data prices. Vodacom chief executive Shameel Joosub said yesterday that, in the six months, the company reduced its data prices by 24.2 percent.
“On October 1, 2017, we further reduced out-of-bundle prices by up to 50 percent. We have consistently said throughout the year that we would accelerate the reduction in data prices and address out-of-bundle prices.
“We have managed to do this while continuing to invest significantly in infrastructure at a time when the lack of available spectrum is pushing our costs higher.
“Without new spectrum we are forced to build more base stations to meet data growth demand. Additional spectrum will allow us to invest more efficiently and accelerate our rural coverage programme. Over the six-month period, we invested R3.9 billion to maintain our network lead and enhance our IT systems,” said Joosub.
In the six months, headline earnings per share were up 1.1 percent to 445 cents a share.
The company declared an interim dividend per share of 390c, down from last year’s 395c. The cut in the dividend was the main reason for yesterday’s fall in Vodacom’s shares on the JSE, according to Vestact portfolio manager Bright Khumalo.
Vodacom shares yesterday closed 3.35 percent lower on The JSE at R147.34 a share. Telecoms companies generally offered attractive dividend yields, said Khumalo.
Vodacom’s revenue grew by 4.6 percent to R42bn. South Africa’s revenue was up 7.7 percent. Vodacom added 4.3 million customers during the first half of the year, 2.9 million in South Africa and 1.4 million in its international operations. In total, the group has 71 million customers.
Joosub reiterated that the company would co-operate with the Competition Commission abuse of dominance investigation in relation to Vodacom’s R5bn contract with the National Treasury.