* Targets new services contribution of 25%-30%
* Full year operating profit growth of 28.23 bln rand
* Group service revenue growth boosted by fintech, digital
* Launching in Ethiopia later this year
JOHANNESBURG, May 16 (Reuters) - South Africa's Vodacom
Group expects new digital and financial services to
generate over a quarter of group service revenue in the medium
term, its chief executive said on Monday as the telecom operator
reported a rise in full year operating profit.
Vodacom, like its peer MTN Group, has been
transforming its business from just providing telecom services
to building a technology company that now enables its 129.6
million customers to also lend money, make payments, shop online
and control appliances at home using smartphones.
It is betting on millions of Africans that still don't have
access to financial services and on the continued growth of
smartphone adoption and internet penetration on the continent.
Vodacom's aggressive focus on new services, which include
digital and financial services, fixed broadband and internet of
things (IoT) - the concept of connecting household devices to
the internet - supported its normalised group service revenue
growth of 4.6% to 79.9 billion rand ($4.91 billion) in the year
ended March 31.
Revenue from financial services, the largest component of
sales of new services, jumped 14.4% to 7.6 billion rand. That
growth was driven by strong adoption of Vodacom's South African
"super-app", VodaPay - which allows users to pay for bills and
shop from various online stores in the app using their
smartphones - and by continued growth of its M-Pesa mobile money
Since its launch last October, VodaPay has attracted 2.2
million downloads and 1.6 million registered users, Vodacom
Group Chief Executive Shameel Joosub said in a statement.
IoT was up 32.1%, supported by products in agriculture and
smart infrastructure. On aggregate, these new services amounted
to 14.3 billion rand and contributed 17.9% to group service
revenue, he added. The group is targeting a contribution of
"Each year we see a step up of the contribution of these new
services and part of that will be underpinned by the launch of
e-commerce through the super app and capabilities of VodaPay in
all our markets," Joosub told a media conference.
Vodacom is finalising asset acquisitions of Vodafone Egypt
from parent company Vodafone and buying fibre assets in
Through a consortium led by Kenyan telecoms operator
Safaricom, the parties including Vodacom plan to
launch in Ethiopia by this year after a delay due to a conflict
in northern Ethiopia that broke out in 2020. Vodacom partly owns
"We are quite encouraged by the fact that things are getting
better on the ceasefire and so on. We're busy on the rollouts at
the moment and we'll launch later this year," Joosub said.
Egypt and Ethiopia, each with populations of over 100
million people, "provide transformational opportunities for
financial services," he added.
Vodacom reported a normalised operating profit of 28.23
billion rand for the year, up from 27.65 billion rand in 2021,
while headline earnings per share rose by 3.4%.
($1 = 16.2022 rand)
(Reporting by Nqobile Dludla; Editing by Tom Hogue, Sherry
Jacob-Phillips and Susan Fenton)