VOD Vodafone Group PLC

   By Alexandra Wexler 
 

JOHANNESBURG--Vodacom Group Ltd. (VOD.JO), South Africa's largest mobile operator by subscribers, missed expectations for revenue in the three months ended June 30, as the company's international operations were affected by new customer registration processes, especially in Mozambique and Congo, as well as increased competition.

Vodacom, majority-owned by the U.K.'s Vodafone Group PLC, reported revenue of 19.9 billion South African rand ($1.39 billion), missing expectations for revenue of ZAR23.56 billion. Still, revenue was up 5.8% from the same period a year earlier.

The company's total active customers fell 2.6% to 61.8 million, the company said.

Total active international customers fell 12% to 26.7 million in the first quarter, while in South Africa, the company's total active customers rose 5.4% to 35.1 million.

Last year, Nigerian authorities fined MTN Group Ltd., Africa's largest telecommunications company, billions of dollars after it failed to disconnect improperly registered SIM cards by a government-imposed deadline, under regulations meant to combat terrorism.

The Congolese and Mozambican governments ordered similar disconnections of unregistered users last year under new subscriber registration legislation. Vodacom's active users in Congo dropped 29% to 8.5 million, while in Mozambique, active customers fell 4.3% to 4.8 million.

Still, active data users in Congo rose 24% to 2.9 million and in Mozambique, were up 3.2% to 2.1 million customers. Total active smart devices on the network rose 18% to 14.1 million in the three months to June 30, and in the international segment, 41% of active customers used data during the first quarter, up from 34% during the same period a year earlier.

That is due largely to Vodacom's sales of more affordable smartphones and other data devices, as well as better network quality and coverage. Total revenue from data increased 19% to ZAR5.79 billion in the quarter, accounting for 34% of service revenue.

Vodacom said it would continue to stoke growth of data usage with a range of reasonably priced Vodacom-branded devices.

Write to Alexandra Wexler at alexandra.wexler@wsj.com

(END) Dow Jones Newswires

July 21, 2016 03:22 ET (07:22 GMT)

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