Vodacom Loses 5.7 Million Customers, But Boosts Revenue Through Higher Data Spending

Vodacom South Africa has reported a surprising combination of subscriber loss and financial growth in its 2025 financial year, highlighting how fewer — but more engaged — customers can still drive strong revenue performance.

According to the results released for the year ended 31 March 2025, the country’s largest mobile operator saw its customer base shrink from 51.7 million to 46 million — a loss of approximately 5.7 million users. Most of the decline came from prepaid subscribers, which dropped by 13.1% to around 39 million users.

Despite this drop, Vodacom’s service revenue rose 2.3% year-on-year to R63 billion, bolstered by higher average revenue per user (ARPU), increased mobile data usage, and steady growth in contract and financial services.

What Caused the Subscriber Drop?

Vodacom attributed the fall in customer numbers to a strategic decision to cut down on inactive users and reduce excessive SIM-card churn by optimising gross additions. The operator chose to focus on profitability rather than volume.

This approach seems to have paid off — prepaid revenue rose by 3.5% to R27.3 billion, thanks to improved data monetisation and price optimisation.

Data Usage Surges Amid Customer Consolidation

One of the biggest revenue drivers was increased mobile data consumption. Data traffic on the network jumped by 36.4% year-on-year, with even greater growth in the fourth quarter. Data revenue on prepaid lines grew by 12.0% to R14.2 billion.

Vodacom said smartphone penetration played a key role, with smart devices on the network rising to 32.3 million, and the number of 4G and 5G devices increasing to 24.4 million. The average monthly usage per smart device rose 31.7% to 5.1GB.

Contract Customers and Financial Services

Vodacom’s contract base saw modest growth, adding 152,000 new subscribers. Contract revenue was up 3.8% to R24.4 billion, with ARPU at R306, a 1.7% increase.

On the financial services side, Vodacom saw a 7.9% revenue increase, generating R3.4 billion from offerings like Airtime Advance, insurance products, and its payments and lending marketplaces.

Vodacom Business Under Pressure

While most segments grew, Vodacom Business reported a 2.3% decline in revenue to R16.9 billion, as enterprise customers trimmed budgets. However, niche segments like cloud, hosting, and cybersecurity grew significantly, with a 35.6% increase in that area.

Network Investment and Outlook

Vodacom continued to invest heavily in its network infrastructure, with R11.6 billion in capital expenditure during the year. For 2026, it expects capex to rise slightly to R12 billion, focusing on energy resilience, spectrum rollout, and IT systems.

Despite losing millions of users, Vodacom’s Ebitda rose 2.3% to R33.6 billion, and operating profit increased 2.1% to R20.5 billion, proving the business can remain profitable through strategic trimming and a focus on high-value users.

In an environment where customer numbers are often seen as the primary success metric, Vodacom South Africa’s latest results offer a compelling narrative: it’s not always about how many customers you have — it’s about how engaged and valuable they are.

{Source: My Broad Band}

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