Vodacom's earnings up

Vodacom's share price rallied to a new high after releasing "a great set of results" yesterday, it said.

The move pushed Vodacom's market capitalisation above R172-billion, nearly 20 times the size of Telkom.

After holding a majority stake in Vodacom for much of the past two decades, Telkom in 2009 unbundled the remainder of its shares.

The two companies have followed different routes since.

The state-owed fixed-line operator has embarked on a cellular venture of its own, 8ta.

But 8ta has not started spinning the profits Telkom desires.

Telkom was last week hit by the sudden resignation of its CEO, Nombulelo Moholi, a few weeks after the government made changes to its board.

Vodacom, which has a new CEO in Shameel Joosub, has managed to increase its earnings in the past six months by 14.5%.

Data was becoming an ever more important revenue stream for Vodacom, Joosub said, and it now accounts for about 16% of service revenue.

"Our strategy of driving smartphone penetration and data usage is working well," said Joosub.

Vodacom said the number of active smartphones in South Africa has grown by 36% compared to a year ago.

The average amount of data used by each of those handsets is up by 46%, it said.

"Across the group, only 35% of our active customer base is actively using data, so we're still very much at the beginning of this growth trend," Joosub said.

Whereas Telkom's ventures across South Africa's border have suffered a multibillion-rand loss in Nigeria, Vodacom has done well on the rest of the continent.

Although originally criticised for lagging MTN in the lucrative African market, Vodacom has made positive strides.

Its international operations now contribute more than a tenth of the company's earnings before interest, tax, depreciation and amortisation.

Vodacom shares were up 4.95% yesterday to close at R116.39.

The company declared an interim dividend of 355c per ordinary share.