South African operations Analyst presentation 2009
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
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♦ 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
Analyst presentation 2009
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%
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Estimated
70%70%
ations
70%70%people penetration
Analyst presentation 2009
St fi i l fStrong financial performance
Revenue EBITDAR million R million
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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
Analyst presentation 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
Analyst presentation 2009
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
Analyst presentation 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
Analyst presentation 2009
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
Analyst presentation 2009
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)
Analyst presentation 2009
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
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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
Analyst presentation 2009
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
Analyst presentation 2009
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
Analyst presentation 2009
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
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♦ 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
Analyst presentation 2009
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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Analyst presentation 2009
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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Analyst presentation 2009
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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Analyst presentation 2009
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
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Analyst presentation 2009
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
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Cross selling and up selling
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SteadyEddies
Status Seekers
Mobile ManiacsRevenue generation
ations
Churn prevention
Analyst presentation 2009
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
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♦ 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
Analyst presentation 2009
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
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Priorities
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♦ Focus on affordable solutions and adding value
♦ Further enhance network coverage and quality
♦ Democratise access to data communications
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♦ 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
Analyst presentation 2009
Q&A
South African operations
Analyst presentation 2009