12 June 2018

Tanzania: Vodacom Tanzania Dividend Proposal Up

VODACOM Tanzania has recommended a gross dividend of 17.33/- per issued and fully paid shares for the period ended March this year up compared to 12.74/- paid last year, due to strong profit posted on account of strong growth of mobile ecosystem business like M-Pesa use and Data.

A statement issued by Vodacom yesterday stated that the recommended dividend is subject for approval at the shareholders Annual General Meeting scheduled for August. After approval, the dividend will be paid directly to shareholders bank accounts, through M-Pesa, Airtel Money, and Tigo Pesa in November.

Vodacom registered 170.2bn/- net profit for the period that ended March this year from 47.5bn/- in March 2017 representing 200 per cent change. M-pesa revenue grew by 16.7 per cent, which makes 291.2bn/-, while the mobile data usage grew by 34 percentage making 141.6bn/- due to account network densification, capacity upgrade and 4G expansion.

M-Pesa revenue grew by 16.7 per cent to 291.2bn/- equivalent to 30.1 per cent due to greater customer spend across growing mobile ecosystem. Similarly, the Dar es Salaam Stock Exchange (DSE) listed Vodacom Tanzania's mobile data revenue grew by 34 per cent to 141.6bn/- on account of network densification, capacity upgrade and 4G expansion.

"We believe our M-Pesa customer base will continue to expand as we focus on building greater activity through our 'Lipa kwa M-Pesa' merchant platform and establishing new partnership which enhance the mobile money ecosystem," Ian Ferrao, Vodacom Managing Director said in a statement on the company's preliminary results for the year ending March 2018.

He added, "We expect further increases in smartphone penetration, stimulated by the continuation of partnership-led, low-cost smartphone campaigns," Expanding network's capacity through spectrum acquisition is a core component of Vodacom's long term strategy.

The company will therefore seek to obtain the optimal amount of spectrum available from the upcoming 700 MHz auction at a reasonable cost. "Our actions taken as part of our continued commitment to improving compliance with customer registration requirements will result in subdued base growth over the short term," he said.

However, encouraging trends seen from the adoption of personalised offers is expected to offset churn through building customer loyalty within our registered customer base. Also during the year under review, operating and financial review service revenue grew 5.9 per cent to 966.3bn/-, attesting its success in delivering superior data user experience and mobile money ecosystem to our customers.

Strong fundamental growth was seen throughout the year, however a 42.1 per cent mobile termination rate ('MTR') reduction, made in the final quarter, dampened service revenue growth acceleration. Active customers increased 1.9 per cent to 12.9 million.

Lower customer base growth resulted from actions taken towards improving compliance with customer registration requirements which, when coupled with enhanced registration processes, significantly reduced the risk of receiving additional compliance orders.

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