south african operations - vodacom · south african operations ... gsm/gprs edge 3g sout h gprs...

South African operations

Analyst presentation 2009

S i i iSocio-economic overview

Country snapshot Population

♦ Africa’s largest economy with well developed legal, financial, communications and natural resources industries

♦ Significant public expenditure programmes, growing

Country snapshot Population

Millions

g p p p g , g gmiddle class and robust banking system expected to support economy

♦ Government budget forecasts for GDP growth reduced to 1.2%, the lowest since 1998

South

♦ Large official population boosted by significant unregistered base of immigrant workers

♦ Elections scheduled for 2009

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GDP per capita Inflation

%US$

4 2%4 2%Source: EIU, StatsSA

4.2%4.2%CAGR


T l k t iTelecoms market overview

♦ Fixed line penetration (Dec 07): 8 4%

Mobile SIM penetration Fixed-line and broadband snapshot

At 31 December

♦ Fixed-line penetration (Dec-07): 8.4%

♦ PC penetration (Dec-07): 13.4%

♦ Broadband penetration (Dec-08E): 2.8%

Southh A

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Estimated

70%70%

ations

70%70%people penetration


St fi i l fStrong financial performance

Revenue EBITDAR million R million

Southh A

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17 3%17 3%

ations

15.7%15.7%CAGR and 12.2% growth in H1 2009

17.3%17.3%CAGR and 11.9% growth in H1 2009


C ti d th i tContinued growth in customers

Prepaid customersThousands

Contract customersThousands

8.3% 8.3% 12.7% 12.7%

South

year on year growth to December 2008

year on year growth to December 2008

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Prepaid ARPU Contract ARPUR R

ations


St th i d t d i b b db dStrong growth in data revenue driven by broadband

SA data revenue as a % of revenueBroadband connectivity packagesThousands % of SA revenue

12.3

South

8.4

10.9

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6.1

ations

FY 2006 FY 2007 FY 2008 H1 2009


L di k t h i i d b db dLeading market shares in voice and broadbandVodacom SA is the market leader in terms of mobile and broadband customers

Market share of broadband customersAt 30 September 2008

Market share of mobile customers

1As at 30 September 2008

1

South

2

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% 1 V d 39

3

2

3 4

5

4

ations

1. Vodacom 39 2. Telkom 363. MTN 154. iBurst 65. Other 4

% 1. Vodacom 532. MTN 343. Cell C 114 Virgin Mobile 1 5. Other 4 4. Virgin Mobile 1

Source: My Broadband, November 2008, Vodacom estimatesSource: Company information, Vodacom estimates


B ildi b i t l dBuilding a business to leadVodacom SA is the market leader in terms of customers and revenue market share

Customercare Network care

South

Supply chain

Products and

services

customer

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managementcustomer ations

Distribution

Brand


A hi h lit t k ith i i b db dA high quality network with improving broadband coverageThe investment in network infrastructure and state-of-the-art technologies has enabled Vodacom to develop a leading market position in mobile voice and data

GSM/GPRS EDGE 3G

South

GPRS EDGE UMTS

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♦ Covers 98% of the SA population♦ Data throughput of up 68 kb/s

♦ Covers 26% of the SA population♦ Data throughput of up to 236 kb/s

♦ Covers 27% of the SA population♦ Data throughput of up to 3.6 Mb/s

ations

In addition to improving coverage, investments are being made to improve efficiency and quality♦ Radio access network♦ Softswitches♦ Self-built transmission (microwave and fibre)


A diff ti t i l h i tA differentiator in supply chain managementVodacom has a state-of-the-art warehouse in Midrand that handles on overage more than 160,000 units per day, 98% of which are delivered within 48 hours to major centres

SA handset sales

Units (millions)

4.7

5.2

South

3.9

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2.1

2.5

ations

25.4%25.4%CAGR

FY 2004 FY 2005 FY 2006 FY 2007 FY 2008

CAGR


Eff ti di t ib ti t k h l i h f ll tEffective distribution network helps win share of walletVodacom’s strategy is based on optimising the path to market across as broad a spectrum as possible, with more than 25,000 points of sale in South Africa

♦ Three service providers, with VSPC as the

Channels

♦ Three service providers, with VSPC as the flagship service provider

♦ Distribution channels include– national chains/retail outlets

South

– informal channel comprising of street vendors– company and independently owned cellular

dealer and franchise outlets– Vodacom Business an extensive direct sales

h African operaVodacom Business, an extensive direct sales

division within Vodacom– Vodacom’s call centre-based online and off-

the-page selling division Vodaworld a unique one stop mobile

ations

– Vodaworld, a unique one-stop mobile telecommunications mall

– Community services operators


B d k ti d hiBrand, marketing and sponsorship

♦ As voted for by Markinor—Sunday Times Top Brand survey

A leading South African brand

y– Number one telecommunications brand– Fourth overall favourite brand along-side Coca-Cola,

SABMiller and Nike– Fifth coolest brand in South Africa

SouthFifth coolest brand in South Africa

♦ Vodacom voted favourite advertiser– iconic “Meerkat” and entertaining “Lucky and George”

commercials

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♦ Vodacom continues its evolution into a truly customer-centric brand

Sports teams Tournaments

ations

♦ Springboks

♦ Bafana Bafana

♦ Vodacom Blue Bulls

♦ Vodacom Super 14

♦ Vodacom Cup

♦ Vodacom Tri Nations♦ Vodacom Cheetahs

♦ Other prominent rugby and soccer teams

♦ Vodacom Challenge

♦ Vodacom Durban July


B d t d b i t t i l d itBrand supported by investment in employees and communityVodacom is considered one of the most favourable employers in South Africa due to its track record of human resources and community service initiatives

For our employees

♦ Equal opportunities

♦ International and domestic development opportunities

- R70 million development expenditure

♦ A wide range of job specific training programmes

South

♦ Competitive compensation and other benefits

♦ Budgeted well-being spend of R10 million in this financial year

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For our communities

♦ The Vodacom Foundation gives effect to the Vodacom Group’s commitment of sharing the successes of the company with the communities in which it operates

ations

company with the communities in which it operates.

♦ Focus areas:

- Education

- Health

- Security

♦ Total spend of R500 million since our inception, year to date spend of R70 million


D li i ff d bl l tiDelivering affordable solutionsVodacom continues to grow its customer base and prepaid ARPUs by delivering new affordable products

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D l i i ti d t t l d i th k tDeveloping innovative products to lead in the marketContinuing our legacy of first to market with products and services sustains our market leading position

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D li i hi h d d t l tiDelivering high speed data solutionsVodacom is the largest provider of mobile broadband services in South Africa and is consistently bringing new products to market to entrench its leadership position

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D li i d l tiDelivering new converged consumer solutionsNew converged services provide an additional customer retention tool and can support ARPU growth

Online services

Media & EntertainmentMedia & Entertainment

Advertising

Financial

SouthFinancial h A

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T t d i tTargeted campaign managementVodacom’s campaign management system enables it to cost effectively target customers for the promotion of its innovative products and services

St i htCustomer lifecycle ConfidentCommunicators

Cautious Carers

Straight Talkers

Customer lifecycle management

South

Cross selling and up selling

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SteadyEddies

Status Seekers

Mobile ManiacsRevenue generation

ations

Churn prevention


C t d t tiCustomer care and retentionLoyalty programmes and customer care are essential for effective churn management

♦ Onyx ♦ Talking points

Contract Prepaid

mm

es

– 3,000 users

♦ Platinum– 11,000 users

– 3.4 million redemptions to date– redemption rate increased to 49.6%

♦ Yebo millionaireslty p

rogr

am

South

♦ Credit card– 33,000

– 10.1 million unique users to date– 180 million SMSs received from launch– 1 million winners to date

Loya

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♦ Seven company owned, ♦ Vodacare specialises in ♦ Redesign of the existing

Walk-in centres VodacareCall centres

are

ations

yVodacom customer care and data care centres

♦ 10% year on year increase in foot traffic in one stop shops

cellular repairs

♦ 39 branches and franchises in all major centres

g gcustomer care IVRs

♦ Re-engineering agent skills to a specialised single skilled environmentusto

mer

ca

foot traffic in one-stop shops

♦ Vodaworld has over one million visits per year

♦ 100,000 repairs per monthskilled environment

♦ Answer 70% of calls in 20 sec

Cu


K h ll d i itiKey challenges and priorities

Key challenges

♦ Economic climate and reducing consumer spending

♦ Increasing competition from new ECN licensees

Key challenges

g p

♦ Changes in regulatory environment

South

Priorities

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♦ Focus on affordable solutions and adding value

♦ Further enhance network coverage and quality

♦ Democratise access to data communications

ations

♦ Democratise access to data communications

♦ Maximise synergy benefits between mobile operation, Gateway, and Vodacom Business

F t t l♦ Focus on cost control

♦ Customer traction in Vodacom Business


Q&A

South African operations


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