Research archive for VOD

Vodacom's BBBEE scheme "YeboYethu" is in the process of unwinding as there's a new deal in the pipeline. Yesterday the company came out with an exciting SENS announcement where a special dividend was officially declared. In the SENS the company said the following:

Vodacom released a trading update yesterday, for the quarter ending 30 June 2018. Service revenues up 4.2% on the back of 2.5 million new customers, of which 1.5 million of those were here at home, and the rest was from their international operations. This puts Vodacom's total subscriber numbers at 76.5 million, an increase of 10.3% year-on-year. The group saw prepaid growing more than contract on an average revenue per user basis.

Vodacom released their full-year numbers yesterday showing growth in both subscriber numbers and revenues.

Vodacom reported full year numbers on Monday. The company traces its heritage back to the dawn of democracy in South Africa, I had the pleasure of being at a dinner birthday function and sat with a man who was part of the team that wrote that there would be a maximum (at the time) of 250 thousand users of the mobile service. Phones were big and clunky and took calls only, remember? It is a little difficult to believe that the touchscreen smartphones are not that old, and in terms of being mainstream, less than a decade. The iPhone is not even 10 years old. Remember the Symbian operating systems on the Nokia? Remember Nokia? Remember Windows phones, how huge that was going to be. It is Android and iOS now, to be fair there are others, not as dominant as these ones.

Vodacom's share price was up over 3% yesterday on the news that the PIC has bought governments stake in the company but also on the news that the Neotel merger has been recommended for approval. Here is the media statement from the Competitions Commission - Commission recommends approval of Vodacom/Neotel merger with conditions.

Yesterday Vodacom released their Annual results for the year ended 31 March 2015. The number that first catches your eye is the impact of the 50% decrease in the mobile termination rate (MTR). The MTR impact was R 2 billion in revenues and R 1.2 billion in EBITDA, it is not great to see these numbers but the impact has now been felt. Interconnect rates now account for less than 5% of revenues and even though MTR will continue to drop over the coming years, the drop will be nowhere as big as last years one.

Vodacom have hiked their contract prices. I think it is about time. Come one. People want a 4G/LTE network, an amazing handset (the new iPhone is fabulous) and on an inflation adjusted basis they have been paying less. Yet the Rand has weakened and the handsets and services have improved. If you stand with your handset anywhere in the urban areas and get a fantastic LTE connection, well then I am sorry, there is a price associated with that. I think that this is a very important point in the cell phone pricing wars, if your best customers demand the best services, then I am afraid that there is an associated cost with that.

Vodacom have released quarterly numbers this morning, they look pretty average. That is to be expected I guess. Local revenues getting squeezed, CEO Shameel Joosub had this to say in the commentary: There was a significant impact from the 50% decline in mobile termination rates in South Africa, increased competition and we're seeing increased pressure on consumer spending. Data spend continues to be the only bright spot in these numbers, data traffic grew a whopping 62 percent here and an astonishing (off a low base) almost threefold in their international operations. Active smartphones and tablets across the network here in South Africa is 9.5 million devices. Forget about broadband, the people have spoken, the continued investment in 3G and LTE networks will continue to see customers view the mobile networks as their goto for data.

We skipped it last Thursday, there was too much going on at the time, rather late than never, here are the Vodacom Group Limited quarterly update for the period ended 30 June 2014. The table snapshot from the press release sums it up:

A company evolving right now is Vodacom, with only one more hurdle left. And quite possibly a huge one, in an announcement this morning Vodacom have agreed with Neotel to buy all of it for 7 billion Rand. But the deal remains "subject to regulatory approvals". But how would you, the consumer benefit? Well, it seems that the more lucrative business market would benefit: "Vodacom's customer base will benefit from Neotel's extensive fibre assets and enterprise capabilities which will allow Vodacom to accelerate its fixed enterprise strategy and stimulate greater competition in the South African fixed telecommunications sector."

This morning we received a quarterly update from Vodacom for the period ended 31 December 2013. The numbers look really impressive. Group revenue increased 10.5% to R20bn. Service revenue increased by 6.4% while data revenue increased 40.7%. Data is now amazingly 22% of all revenues. Who would have thought a few years ago.

Vodacom results, the other day, did you see them? Here they are: For the six months ended 30 September 2013. With the payoff line Power to you. Nice. Highlights for the period include the subscriber base having expanded to 53.8 million folks with the prepaid active customer base having increased by 927 thousand.

I think that Reuters broke the story Friday, but there was a confirmation yesterday that Vodacom were looking to buy Neotel yesterday. Or let me rephrase that, they are looking to buy. Because there are some issues with regards to the competitions authorities and those would need to be addressed, but I can see how the Vodacom hook up with Neotel would work. According to this article in MyBroadband: Vodacom-Neotel deal discussions confirmed, 15 thousand km's of fibre optic network, more than half of that in the Jozi, Cape Town and Durban areas. This would not be anti competitive, but rather could be seen as a direct challenge towards the fellows over at Telkom. Who seemingly are steering the ship in the right direction for now.

Yesterday we received a very informative trading statement for the quarter ended 30 June from Vodacom. Group revenues are up 3% for the quarter while customers increased by 5.3% to 51.5 million. Although still small, their international operations grew revenue by 14.1% while South African revenues increased 3.9%. There was a once off sale of Gateway carrier services which had a negative impact on operating revenues.

Decent. That is the very best way that I can describe the full year numbers from Vodacom this morning. No, very decent in fact and very respectable in an environment that is a little meh. Everyone will get excited about the dividend. In a world with low yields everywhere, this is one that you have to get excited about. For the full year the dividend declared was 785 cents. Less the 15 percent withholding tax and you come to 667.25 cents, a very favourable 5.7 percent historical yield on the Friday closing price of 115.82 ZAR per share. Headline earnings for the full year increased 23 percent to 872 cents, giving the company a fairly modest earnings multiple of just shy of 13.3 times. Not expensive, not overly cheap.