CORPORATE FORTUNES

Home Demand, Forex Staves Off Vodacom Virus Impact

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Vodacom Group reported a jump in data usage in its home market of South Africa in its fiscal Q1 (the three months to end-June), as foreign exchange movements offset a pandemic-related revenue decline in its international operations.

In its trading update, the company reported an increase of 5.6 per cent in group revenue to ZAR22.7 billion (US$1.4 billion), largely on increased demand for connectivity services during lockdown measures in South Africa and devaluation of the South African rand boosting income from its other operations. Profit is not declared on a quarterly basis.

Stripping out the impact of currency movements and other one-off costs, its group revenue increase would have been a more muted 1.3 per cent. Its international division reported a drop in underlying service revenue of 5.3 per cent.

The decline from its international operations was attributed to lower economic trading activity, cutting fees on some mobile money transactions as part of Covid-19 (coronavirus) prevention measures and new customer registration requirements.

Though noting positive trends in South Africa, CEO Shameel Joosub noted the company remained “cautious about the impact of Covid-19 on our operations and uncertainty about the pace of economic recovery in each of the countries where we operate, as disposable income will increasingly come under pressure as a result of rising unemployment and reduced economic activity.”

In its home market, Joosub pointed to lockdown measures and a cut in tariffs for causing a spike in demand for both fixed and mobile connectivity, with a temporary spectrum assignment from the regulator helping it service demand. https://www.mobileworldlive.com

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