South Africa based Vodacom has released its preliminary results for the first-quarter of this year. The company reported a 3% growth in group service revenue to R58.5 billion (US$7.7 billion), while group traffic grew by 11.3% supported by tariff reductions.
Net income fell 31 percent to R4.2 billion (US$552 million) in the 12 months through March, from R6.1 billion a year earlier.
South African legislation requiring prepay SIM cards to be registered (RICA) impacted negatively on South African customer numbers. The subscriber base dropped by 4.9% to 26.3 million.
Pieter Uys, Vodacom Group CEO, commented: "The environment in which Vodacom operates is very different to that seen a few years ago, and I'm pleased that the steps we have taken to reshape and reposition the Group are evident in these results. Customers in all of our markets have felt the effects of still fragile economic conditions and we have responded by increasing the value delivered to customers, made possible through cost containment measures taken across the Group. We reduced prices in all markets, expanded our data business and delivered strong growth in free cash flow."
He added that the strengthened financial position supports an increase in the dividend payout to shareholders. As Vodafone owns 65% of Vodacom, it will be a primary beneficiary from the increased dividend payments.
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