VODACOM's revenue for the three months to June came under pressure but it managed to raise subscriber numbers by 29% to 50-million, with most of the new customers coming from SA.
The company yesterday reported a reduction in revenue to R17,02bn from R17,18bn at the end of March. Revenue from SA was down 2,6% to R14bn.
Competition in the mobile industry increased significantly in the past few months when Cell C introduced aggressive price cuts, forcing its rivals to do the same. But the price cuts initiated by Vodacom were largely done on a promotional basis rather than permanent. Most of Cell C's price cuts are permanent.
Vodacom CEO Pieter Uys said one of the company's key advantages in SA was the size and reach of its network coverage.
"Given the increasingly competitive environment, quality and capacity both set Vodacom apart and give us the means to compete with targeted value promotions," Mr Uys said.
Vodacom added 2-million subscribers in SA from April to the end of last month, taking the total figure in SA to 31-million, thanks to promotional price cuts, which were largely prompted by aggressive price cuts by competitors.
Mr Uys said Vodacom would continue to introduce new promotions and to make successful packages a permanent feature.
In SA, data customer growth and higher usage from April to last month were offset by heightened mobile broadband competition. But active data customers rose 28,6% year on year to 12,4-million. Vodacom aims to have 25-million data customers by 2014.
Mr Uys said Vodacom would continue to invest to better network capacity for voice and data.
Andrew Kingston of Sanlam Investment Management said Vodacom's quarterly performance was in line with expectations. However, he said that SA's performance was slightly behind expectations while Vodacom's international businesses performed above expectations.
Mr Kingston said it was difficult to attribute the decline in revenue from SA to competition in the absence of numbers from competitors. "It is difficult to know the effect of competition but market conditions are difficult. Vodacom seems to be executing its strategy well, especially in international markets," he said.
Vodacom's international businesses in Tanzania, Lesotho, Mozambique and the Democratic Republic of Congo reported a 29,4% rise in customers to 19-million. Revenue was up 5,7% to R3,1bn. The primary driver of the growth has been "solid commercial execution, supported by a healthy macroeconomic environment", Mr Uys said.
He told Bloomberg this week that the company planned to almost double the share of revenue from outside SA within four years.
"We're running our African businesses much better than two years ago," Mr Uys said.