Africa-Press – South-Africa. SA’s biggest mobile Vodacom says it’s close to reaching a deal with Eskom that will enable it to power its thousands of cellphone towers using privately generated electricity, describing the rolling blackouts as “disastrous” for the country.
Vodacom reported on Monday that group service revenue rose 17% in its year to end-March, but net profit rose only 2.1% to just over R18 billion. The company reported it spent R300 million during the year on diesel, security and maintenance to ensure service continuity, and it has spent more than R4 billion on items such as batteries and generators since 2020.
But this helped ensure its customers remained connected 94% of the time during load shedding, said CEO Shameel Joosub said during an investor presentation.
Vodacom said it remains confident that the “virtual wheeling” pilot project it is pioneering with Eskom will soon be signed off which will enable it to power its cellphone from privately generated electricity.
It has also committed to sustained investment spending of up to 14.5% of its group revenue on capital expenditure to keep its customers connected.
During the year ended March 2023, Vodacom Group increased its revenue 16% to just over R119.2 billion from its 185.8 million customers across Africa. Included in this was a more than 29% growth in financial services revenue, representing R9.9 billion of group revenue. Vodacom’s 70.6 million mobile data financial services customers across Africa transacted more than $1 billion a day.
Vodacom said its M-Pesa remains Africa’s largest mobile money platform that has been able to process approximately $365 billion worth of transaction during the year.
Vodacom’s R43.6 billion acquisition of a 55% stake in Vodafone Egypt helped the cellphone network operator expand into one of Africa’s largest markets. Vodacom’s operations across the African continent give it exposure a population of more than 500 million people.
The latest addition to this is Safaricom Ethiopia, which started operating in the Horn of Africa nation in October 2022 after Vodacom’s Kenyan subsidiary won the only operating licence available. Safaricom Ethiopia is now the second operator in the country, which has been dominated by the state-owned Ethio Telecom monopoly.
“It is a huge market with more than 140 million people and the cellphone penetration is low,” said Joosub. Only about 47 million of Ethiopians currently use mobile phones, leaving about 100 million people available for new connections. Vodacom’s investments are therefore poised to open up the market and will pitch it against the state-owned monopoly.
Vodacom also has operations in the Democratic Republic of Congo, Lesotho, Mozambique and Tanzania.
After a few months of operations, Safaricom Ethiopia has notched up more than 2 million cellphone users and was last week awarded a mobile financial services licence. Due to the start-up investments over the next four years, Vodacom expects this unit to continue to record financial losses in this period.
Shares in Vodacom were up less than 1% in early afternoon trade on Monday but have lost over a fifth of their value in the past year.
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