SA’s largest mobile operator Vodacom’s share price fell as much as 8% on Thursday after reporting a decline in revenue
at its SA operation, where it has cut off 337,000 inactive prepaid SIM cards.
The operator said the "one- off" prepaid customers and a tighter economy had resulted in a drop in earnings.
Revenue in SA was down 0.9% to R13.9bn for the three months to end-December, after Vodacom reduced its customers 0.6% to 43.8-million. The group did this because these customers had only subscribed to benefit from one-off promotional voice and data offers.
"Prepaid customer growth was resilient, while efforts to reduce one-off use of SIM cards started to take effect, resulting in lower gross additions in the quarter," Vodacom CEO Shameel Joosub said.
Though the cut in prepaid customers had knocked revenue, World Wide Worx MD Arthur Goldstuck said the results were also affected by a change in consumer behaviour.
This could be seen in consumers reducing their out-of-bundle data usage for the first time. This was an indication that South Africans are making an effort to spend less.
Joosub agreed, saying, "Contract customer service revenue was down 2.7%, impacted by reduced out-of-bundle data spend, as well as customers continuing to migrate to more inclusive value contracts as part of our pricing transformation strategy."
Goldstuck said its results were also affected by operators coming under pressure to reduce the cost of data. This led to Vodacom offering numerous low-cost data bundles, but this hurt it because it did not lead to an increase in usage.
Such pressure was mostly due to the difficult economy. "Data usage is being treated as water and electricity usage,"
In 2018, regulator Icasa stipulated that operators had to let customers roll over unused data in its end-user and subscriber service charter regulations.
Subscriber growth in other countries helped total Vodacom subscriber numbers grow 0.25% to 79-million, when measured against the previous quarter. This had boosted its international operations (Tanzania, Mozambique, DRC and Lesotho) where revenue grew 8.8% to R5.31bn, boosted by sustained data revenue growth (25.4%) and growth of its money transfer platform M-Pesa (30.3%).
Vodacom has also grown its streaming video platform Videoplay to more than 700,000 subscribers and made progress with its Internet of Things operation, which saw a 24% rise to 4.3-million connected devices to its network.
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