Vodacom Tanzania – Interim condensed financial results for HYE 30 September 2022

By Published On: November 14th, 2022Categories: Corporate announcement, Earnings
Vodacom Tanzania Limited 2023 Interim Results For The Half Year

Vodacom Tanzania Limited (VODA.tz) HY2023 Interim Report

Managing Director’s Review

During the first six months of the financial year, Vodacom Tanzania ushered in a new digital era for customers with the launch in September of the country’s first 5G network, a substantial innovation and technology milestone. Access to 5G will not only afford customers a superior customer experience through faster speeds and lower latency, but also support the development of emerging technologies such as Internet of Things. More recently, we secured a market leading spectrum portfolio through an auction process. This investment is key to our network leadership expansion as well as future investment ambitions such as 5G, both critical for bridging the digital divide and delivering on our purpose of connecting people to a better future.

We continue to leverage our ‘Tech for Good’ platforms to deliver on our social contract and purpose. Our M-Kulima platform, is designed to provide farmers with digital agricultural services including cashless electronic payments, market information and weather forecasts through mobile devices. The cashless payment service is available to over 1.3 million registered farmers, an over nine-fold increase in the past six months. Earlier this year we successfully partnered with the government and the Vodafone Foundation to officially launch our national M-Mama program. M-Mama provides transportation service to expectant mothers and newly born infants in rural Tanzania, in an effort to combat maternal mortality rate.

Separately, our M-Pesa platform was selected as a partner of choice in assisting the government initiative to disburse funds in order to support poor families under the Tanzania Social Action Fund (TASAF) initiative. Our involvement in such impactful societal programs as a partner or a service provider, showcases our world class technological capabilities and our commitment to facilitating innovative solutions to communal needs and societal challenges.

Commercially, our advanced machine learning capabilities continued to support product differentiation, providing customised propositions through our multi-product approach – better known as our ‘system of advantage’ – to keep customers confidently connected. Supported by our significant investments, customers increased 5.1% to 16.0 million, data users increased 1.2% to 8.0 million. Significantly, smartphone user growth was 18.2% to 4.7 million, which equates to 58.8% of our data users. Pleasingly, our customer market share expanded by 0.8pp to 30.5%1.

Service revenue growth accelerated in the second quarter up 14.5%, offsetting a 4.3% decline in the first quarter and resulting in a 4.7% increase in service revenue for the six month period. This was supported by a strong performance in the data segment, a recovery in M-Pesa usage and double digit growth in revenue from fixed services. Adjusting for the estimated TZS29.3 billion impact of levies on mobile money, service revenue for the six-month period increased 10.8%*. We reported profit after tax of TZS29.0 billion (TZS40.9 billion*) positively influenced by operating profit and the recognition of a TZS38.3 billion deferred tax asset in relation to our GSM business, reflecting improved medium term prospects for this segment.

The decision by government to review the levies on mobile money transfer and withdrawal transactions introduced on 15 July 2021, will have an uplift in financial inclusion. From 1 July 2022, the government facilitated a further 43% levy reduction for the top-band, marking a cumulative 60% reduction for that band since introduction. This intervention is particularly relevant to our peer-to-peer and cash out transactions which posted a modest recovery in the second quarter and our ability to expand financial inclusion to more Tanzanians. Pleasingly, M-Pesa customers recovered to 7.7 million, up 19.5%. Our M-Pesa revenue trajectory also reflects our ongoing focus on driving innovative products by leveraging on our strategic capabilities from the M-Pesa Africa hub, and accelerated opportunities in new growth areas including digital loans and overdraft services, insurance and merchant payments.

Our M-Pesa app transition into a super-app is making good progress.

The super-app will provide a one stop shopping and financial services experience to our over 400 000 app users. Government’s decision to further reduce the levies to a maximum of TZS2 000 from 1 October 2022, marking a cumulative 80% reduction for the top-band compared to the maximum levy of TZS10 000 in July 2021, is also expected to widen financial inclusivity.

In the first half of the year, we invested TZS74.9 billion in capex to support our business growth and broadband coverage obligations. The capex was directed towards network coverage including 159 new 4G sites and 63 initial 5G sites, capacity enhancement and infrastructure improvements.

This investment supported 30.1% growth in data usage on our network. Importantly, 4G traffic carried on our network increased by 61.7% contributing significantly to a 29.9% year on year growth in mobile data revenue. We expect our 5G rollout to accelerate into the second half of the financial year, providing an additional growth lever specifically on the fixed-wireless access.

Aligned with our purpose, we participated in the October 2022 spectrum auction conducted by the Tanzania Communications Regulatory Authority (TCRA) and secured low and mid-band spectrum.
We were successful with our bids for the one available block of 700 MHz, the two available blocks of 2300 MHz and one of the four blocks of 2600 MHz (TDD), for a total acquisition price of US$63.2 million.


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