JSE-listed telecommunications giant Vodacom Group has posted a strong third quarter, with sustained growth recorded across the group’s International and Egypt operations.

In a trading update for the quarter ended December 31, Vodacom reported that group revenue increased 11% to R43.9-billion, while group service revenue grew 12.7%.

“From a financial performance perspective, the ideal start that we delivered in the first half of the year to our bold Vision 2030 ambitions continued into the third quarter,” said Vodacom Group CEO Shameel Joosub.

Amid a challenging consumer environment and a strong comparative period last year, South Africa delivered “modest but satisfactory” revenue growth of 1.4% to R16.4-billion, supported by robust growth in financial services, fixed connectivity and Internet of Things.

During the three months under review, the contract segment expanded 2.6%, supported by average revenue per user (ARPU) growth. However, prepaid revenue was under pressure owing to a tougher consumer backdrop and promotional pricing.

In South Africa, data traffic surged by 32.3%, supported by sustained investment in network quality and a successful summer campaign driving strong engagement on smart devices, Joosub continued.

The results of the third quarter ended December 31 were bolstered by sustained growth in Vodacom’s Egypt and International operations.

In the International business, service revenue increased 12.6% to R8.8-billion, with normalised growth accelerating to 15.4%, benefiting from strong commercial execution, network modernisation and the scaling of advanced digital and financial services.

Data revenue grew 21.1%, contributing 31.2% of International business service revenue, while M-Pesa revenue accelerated to 22.1% growth, driven by double-digit expansion across all markets. The customer base increased by 12.5% to 65.7-million.

“Including Safaricom, we passed the 100-million financial services customers mark during the quarter. We continue to invest in quality and resilience, modernising networks, scaling 4G and 5G where appropriate and expanding fibre to bridge the digital divide,” he said.

During the third quarter, Egypt remained a standout performer, with service revenue rising by 39% to R9.5-billion, now accounting for 27.5% of group service revenue.

Egypt’s financial services revenue increased 59.4%, supported by a 28.9% increase in active customers to 13.5-million. Data traffic expanded by 25.1%, with data customers up 8.9% to 33.9-million.

Consistent network investment, including the roll-out of 5G services, underpinned healthy ARPU growth and reinforced Egypt’s leadership in customer experience and digital innovation, Joosub said.

Meanwhile, the group’s overall financial services revenue increased by 24.7% to R4.5-billion, remaining a key growth engine for the company.

Mobile money platforms, including Safaricom, processed $500.7-billion in transaction value over the last12 months.

“This encouraging momentum underscores our confidence in the group’s medium-term growth trajectory in an operating environment shaped by macroeconomic and currency stability, which should bode well for the group’s performance for the full financial year,” commented Joosub.

Meanwhile, Vodacom Group started the implementation of the Maziv transaction on December 1, following the Independent Communications Authority of South Africa’s final approval, in November, of the group’s strategic stake in the South African fibre business.

This includes a significant capital injection that better positions the open-access fibre ecosystem to accelerate deployment and enhance customer experience, while supporting inclusive connectivity.

Further, in December, Vodacom announced plans to acquire an additional 20% stake in Safaricom – 15% from the government of Kenya and 5% from Vodafone Group – for $2.1-billion, increasing its effective shareholding in Safaricom to 55%.

Subject to regulatory approvals, this transaction will result in the consolidation of Safaricom into Vodacom upon completion.

“Looking ahead, we remain focused on delivering our medium-term targets, advancing financial inclusion, and executing with discipline across products and geographies. With a strong platform and a clearer line of sight to key strategic milestones, I firmly believe the group is well positioned to capture structural growth while staying true to our purpose of connecting people to a better future,” Joosub concluded.