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Data now 14% of Vodacom income

Vodacom has 4.1-million smartphones in use in the South African market ‚ each averaging 80MB data per month. That has grown data to 14% of revenue, writes ARTHUR GOLDSTUCK.

The data revolution continues apace, with Vodacom’s latest interim results revealing dramatic growth, fueled by smartphones.

Vodacom announced today that data revenue was up 31% for the six months to the end of September 2011, compared to the same period in 2010. Data revenue for the period was R3.9bn, now making up 14% of revenue.

At the interim results presentation in Midrand, CEO Pieter Uys revealed that 70% of Vodacom’s 4700 base stations are now HSPA+ enabled, meaning that they support speeds of (theoretically) up to 21Mbps. More than half the base stations support dual carrier access, which allows for theoretical speeds of up to 43Mbps.

Overall revenue is up 6%, indicating the accelerating importance of data in the revenue equation.

‚The Internet and data is so central, we are integrating it into everything we do,‚ Uys said. ‚If we can put the Internet into everyone’s hands, we will turn not only the country, but the continent, around.‚

The data demand is driven to a large extent by the accelerating penetration of smartphones. Uys said that 30-40% of all data use came from smartphones.

In the six months to the end of September, Vodacom sold 870 000 smartphones, taking the total to 4.1 million smartphones in use on the Vodacom network. And smartphones, said Uys, averaged 80MB data use per day. Total data growth on smartphones was no less than 150% over the past year.

Vodacom has seen a 38% increase in ‚Group active data customers‚ to 12.4 million. This does not necessarily equate to mobile Internet users, as downloads of games, ringtones, wallpaper and the like would be included in those numbers.

At Gadget’s request, Uys and outgoing Chief Financial Officer Rob Shuter broke down the data customer base in more detail at the results presentation. Approximately 3.5-million customers were purchasers of data bundles. Of these, around 1-million were using 3G dongles or data devices: while the rest were using smartphones.

Vodacom’s goal is to reach 25-million data customers by March 2014. This, said Uys, would be strongly driven by sub-R1000 smartphones.

Consequently, the group is investing heavily for data growth, with capital expenditure of R3.5-billion in the past six months, geared towards expansion of 3G and fibre networks, and a ‚focus on network stability and improved customer experience‚ .

On average, data prices had come down 22% during this period, while the cost of voice calls had been reduced by an average of 24% per minute. Number of customers in South Africa had increased 21.1% to 28.9 million. Outgoing voice traffic was up 34.1%, showing that data growth was having no impact on voice calls.

* Follow Arthur on Twitter on @art2gee

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