Vodafone 2016 Annual Report Download - page 169

Overview Strategy review Performance Governance Financials Additional information
Vodafone Group Plc
Annual Report 2016
167
Vodacom
Vodacom Group service revenue declined 1.0%*, as the negative
impact of MTR cuts and a more competitive environment in South
Africa offset growth in Vodacom’s operations outside South Africa.
Q4 service revenue was -0.2%*, reecting some easing of competition
in South Africa.
In South Africa, organic service revenue declined -2.7%*. Excluding the
impact of MTR cuts, service revenue grew 1.4%*. Strong growth
in smartphone penetration and data adoption drove 23.4% growth
in local currency data revenue, although this was offset by aggressive
voice price competition. We have increased our 3G footprint to 96%
population coverage and 4G to 35% coverage as part of the Project
Spring programme, with 81% of sites now connected to high capacity
backhaul. During the year we began to trial our rst bre to the
business services, and bre to the home. The regulatory authorities
continue to review our proposed acquisition of Neotel, a bre-based
xed operator.
Service revenue growth in Vodacom’s operations outside South
Africa was 4.8%*, driven by customer base growth, data take-up and
M-Pesa, Active M-Pesa customers totalled 5.6 million, with M-Pesa
now representing 23% of service revenue in Tanzania. Vodacom Group
EBITDA fell 2.1%*, with a 1.1* percentage point decline in EBITDA margin.
The signicant negative impact of MTR cuts on the EBITDA margin was
substantially offset by good cost control.
Other AMAP
Service revenue increased 5.2%*, with growth in Turkey, Egypt, Qatar
and Ghana partially offset by a decline in New Zealand.
Service revenue in Turkey was up 9.9%*, reecting continued strong
growth in consumer contract and enterprise revenue, including higher
ARPU and data usage, partly offset by a 1.8 percentage point negative
impact from voice and SMS MTR cuts. In Egypt, service revenue grew
2.8%* as a result of an increase in data and voice usage and a more
stable economic environment. In New Zealand, service revenue was
down 3.1%* as a result of aggressive competition, but the contract
mobile base grew 4.6% year-on-year and the xed base beneted
from continued uptake of VDSL, TV and unlimited broadband.
Service revenue in Ghana grew 18.9%* driven by growth in customers,
voice bundles and data. Total revenue growth in Qatar was 13.2%*,
but slowed in H2 due to signicantly increased price competition.
EBITDA grew 7.0%* with a 0.3* percentage point decline
in EBITDA margin.
Associates
Vodafone Hutchison Australia (‘VHA’), in which Vodafone owns a 50%
stake, continued its good recovery, returning to local currency service
revenue growth in Q4 as a result of improving trends in both customer
numbers and ARPU, supported by signicant network enhancements.
Safaricom, Vodafone’s 40% associate which is the number one mobile
operator in Kenya, saw local currency service revenue growth of 12.9%
for the year, with local currency EBITDA up 16.8%. The total value
of deposits, customer transfers, withdrawals and other payments
handled through the M-Pesa system grew 26% to KES 4,181 billion
in the 2015 nancial year.
Indus Towers Limited, the Indian towers company in which Vodafone
has a 42% interest, achieved local currency revenue growth of 4.3%.
Indus owns 116,000 towers, with a tenancy ratio of 2.19x. Our shares
of Indus Towers’ EBITDA and adjusted operating prot were £285 million
and £19 million respectively.