Vodacom South Africa announces revenue growth despite losing over 5.7 million customers in FY 2025

Vodacom South Africa, the country’s leading mobile network operator, reported a 3.5% increase in prepaid mobile customer revenue, reaching R27.3 billion ($1.51 billion) for the financial year ending March 31, 2025, despite a substantial 13.1% decline in its prepaid customer base. The company saw its prepaid subscribers drop from about 44.85 million to 39 million, a loss of about 5.7 million customers, according to its annual financial results released earlier today, 2025.

This performance underscores Vodacom’s ability to enhance revenue through strategic rate management and increased data consumption, even as it faced challenges in retaining customers.

The telecom giant has attributed the significant reduction in its prepaid customer base to a deliberate strategy of optimising gross additions and expunging inactive subscribers. This “clean-up” approach aimed to create a more engaged and revenue-generating customer base.

Despite the loss of millions of subscribers, the company achieved a healthier financial outcome, with prepaid mobile customer revenue rising from the previous year. The growth was particularly notable in the fourth quarter, where prepaid revenue increased by 4.0%, although this was slightly lower than the 5.6% growth recorded in the third quarter, partly due to a leap-year effect in the prior year.

The key driver behind the revenue increase was a 12.2% rise in the average revenue per user (ARPU) for prepaid customers, reaching R55 in the fourth quarter. Vodacom credited this improvement to a focused effort on rate management while maintaining data affordability, which encouraged higher spending among its remaining users.

The surge in mobile data consumption played a key role, with prepaid mobile data revenues climbing 12.0% to R14.2 billion ($786.89 million). This growth was supported by a 36.4% increase in overall data traffic for the year, with the fourth quarter seeing an even higher spike of 39.4%.

Increasing smartphone penetration drives Vodacom’s revenue 

Vodacom’s success in boosting data-related revenue was underpinned by increased smartphone penetration and enhanced network quality. The company reported a 1.5% rise in smart devices to 32.3 million, with 4G and 5G devices growing by 3.1% to 24.4 million.

Average data usage per smart device soared by 31.7% to 5.1GB per month, reflecting the growing reliance on mobile data among South African consumers. Vodacom’s substantial investments in network infrastructure, totalling R11.6 billion in FY 2025, supported this growth by improving resilience, leveraging new spectrum assets, and enhancing IT platforms. The company anticipates increasing its capital expenditure to at least R12.0 billion in the next financial year to further strengthen its network capabilities.

Beyond its prepaid segment, Vodacom also saw positive developments in its contract customer base. Contract customer revenues rose by 3.8% to R24.4 billion, driven by the addition of 152,000 new subscribers and strategic price increases. However, the mobile contract ARPU grew modestly by 1.7% to R306, as price hikes were partially offset by spending pressures in Vodacom Business, where corporate clients managed costs more tightly.

Vodacom’s financial, digital, fixed, and IoT service revenues also performed strongly, growing by 10% to R11.2 billion and contributing 17.8% to total service revenues. Financial services, in particular, saw a 7.9% revenue increase to R3.4 billion, fuelled by the uptake of insurance products, Airtime Advance, payments, and lending marketplace businesses. Fixed service revenue, excluding low-margin wholesale transit, surged by 17.9%, supported by the expansion of fibre connectivity, with 198,000 homes and businesses connected and Vodacom’s own fibre passing nearly 166,000 premises.

Challenges in Vodacom Business and Wholesale

Despite the overall positive financial performance, Vodacom Business faced challenges, with its service revenue declining by 2.3% to R16.9 billion. This downturn was attributed to pressures in wholesale revenue and a tough comparative period from the previous year. However, growth in cloud, hosting, and security services provided a bright spot, with revenues in this segment rising by an impressive 35.6%. The reset in wholesale revenues diluted overall service revenue growth by 1.9 percentage points, highlighting the challenges in this division.

Overall, Vodacom South Africa’s service revenue increased by 2.3% to R63 billion in FY 2025, reflecting resilience in a competitive market. Earnings before interest, tax, depreciation, and amortisation (EBITDA) also grew by 2.3% to R33.567 billion, while operating profit rose by 2.1% to R20.547 billion. These gains were achieved despite macroeconomic challenges, including inflation and previous energy crises, with Vodacom moderating its investment in energy resilience as South Africa’s electricity grid stabilised.

Vodacom Group CEO Shameel Joosub emphasised the company’s strategic focus on connectivity and financial services, noting, “Our improved performance in South Africa was underpinned by successful seasonal campaigns, an improved consumer environment in the prepaid segment, and a 40.6% increase in data traffic.” Joosub also highlighted the company’s broader vision, with posts on X celebrating Vodacom’s 211.3 million customers across Africa and a 5.1% increase in its full-year dividend to 620 cents per share, with a final dividend of 335 cents payable on June 23, 2025.