VODACOM’s share price tumbled as much as 5.7% on Wednesday after it reported its number of South African customers declined slightly to 30.6-million at the end of December from 30.8-million at the end of September.

Increased competition in the prepaid market saw Vodacom’s average revenue per prepaid user fall 15.6% to R81 per month during the December quarter from R96 in the same quarter in 2011. But Wednesday’s quarterly report showed a 9.5% rebound from the September quarter’s R74 average revenue per user.

"It’s been a quarter with strong performances in data and our international operations tempered by some challenges in our South African business," CEO Shameel Joosub said.

December quarter revenue from South African operations rose 2.2% to R15.5bn from the same quarter in the previous year, driven by 27.2% growth in equipment revenue from smartphone and tablet sales.

Vodacom said since October, it has reduced the number of once-off usage prepaid customers. As a result, revenue fell, there was higher churn and net disconnections in the December quarter.

South African data revenue increased 17.2% to R2.3bn, contributing 18% to service revenue compared to 15.1% a year ago.

Data revenue from international operations rose 100% to R306m, driven by the increased take-up of mobile internet services in all markets and the increased penetration of mobile financial services in Tanzania.

Data customers grew 95.4% to 4.7-million.

Vodacom’s investments in the quarter were focused on "maintaining network leadership, most clearly demonstrated by the commercial launch of Vodacom’s LTE (long term evolution) service," Mr Joosub said.