Vodacom Tanzania has posted a strong full year results driven by Data and M-Pesa services.
In its preliminary results for the year ended 31 March 2019. The company achieved a 5.4 per cent growth in service revenue, reaching TZS1,018.9 billion ($443.389 million), driven by strong growth in M-Pesa, mobile data and messaging revenue demonstrating its ambition to pioneer inclusive growth through financial inclusion and connectivity.
According to a statement from Vodacom, the firm maintained market leadership as the number 1 mobile and financial service operator in Tanzania with 14.1 million customers- a growth of 9.6 per cent, increasing its market share to 32.4 per cent. Leadership in mobile money grew to 38.6 per cent reaching 7 million M-Pesa users transacting over TZS4.1 trillion ($1.784 billion) monthly.
Vodacom’s Managing Director, Hisham Hendi said, “The M-Pesa platform continues to open up opportunities for Tanzanians to earn a living registering 620,000 new customers, enabling them to transact through mobile money.’ M-Pesa revenue grew 14.5 per cent to TZS333.5 billion, recording a healthy 9.7 per cent growth in empowered customers transacting on the platform.
Mpesa services are popular in East Africa
Mpesa invenstion is certainly making a huge difference to companies across East Africa.
Last year, Safaricom recorded strong growth in M-Pesa revenues which went up 18.2 per cent to close at Ksh35.52 billion ($350.4 million). This is up from Ksh30.05 billion ($296.4 million).
M-Pesa’s performance is also attributed to the “Lipa kwa M-Pesa” merchant solution which simplifies customer payments at the point of sale. The innovation has supported the government’s drive to foster a strong and competitive economy through the 11 000 active merchants that effected TZS1.1 trillion in transactions during the year, a remarkable increase of 186.0per cent.” He said.
According to the MD, the power of digital technology continues to connect Tanzanians to live a better today and build a brighter tomorrow,’ said Hisham. The company’s growth in data revenue increased to TZS167 billion, a 17.9 per cent growth, while proactive measures to stabilize voice revenue decline are proving to be successful. Interventions to establish floor pricing are critical as current data rates are below cost per MB with the country’s prices recorded as the lowest in Africa. This hinders the company’s ability to reinvest in infrastructure and technology to advance connectivity to Tanzanians.
Vodacom’s 4G and 4G+ network
Highlighting Vodacom’s investment to enhance the customer experience by increasing 4G and 4G+ coverage in major cities, Hisham said, ‘the country’s youth dividend presents an opportunity for the company to upgrade capacity and modernise the network to enable a superior data customer experience.’ During the year, Vodacom made a significant investment of TZS171.4 billion ($74.580 Million) to advance connectivity and added 322 4G sites and 197 3G sites which has enabled it to maintain leadership in 4G coverage across the country.
As expected, the company has seen a 51.9 per cent decline in earnings per share to TZS40.28 as a result of the accounting gain on the sale of equity stake in Helios Towers that was experienced last year. However, excluding these gains, the share-based payments that were recognised in the prior year and one-off penalty, earnings per share grew 21.4per cent. The company’s focus on cost optimization through the ‘Fit for Growth’ programme has supported a remarkable 20.3per cent growth in EBIT with a margin of 11.2per cent, expanding 1.4ppts.
Speaking on Vodacom’s future outlook, Hisham said, “Looking ahead, we remain steadfast in delivering on our strategy by targeting an enhanced data user experience across the country, expanding our mobile money ecosystem through new partnerships and services, and further investment into our high-value and youth segments. Through the Vodacom Foundation we will continue to harness the power of mobile technology and innovation to transform societies and create new possibilities for women and girls in health, education and generate opportunities for financial inclusion. I am confident that our approach will continue to provide resilience and tailored solutions that address development challenges as we seek to deliver on our vision to lead Tanzania into the digital age and to change lives through technology.”