Good morning, everybody, and thanks for joining our virtual annual results presentation. A special welcome to our group CFO, Raisibeh Morati, who joins me on stage. And also warm greetings to members of the Board and my executive management team who have joined us here and online. Before we get into the financial results, I wanted to highlight our progress as a purpose led organization premised on the 3 pillars of digital society, inclusion for all and planet. Our purpose led model shapes our outlook and our business strategy as we connect for a better future.
Our purpose was evident from our response efforts to COVID-nineteen. Vodacom accelerated the delivery of our social contract Stakeholders to ensure that we made meaningful contributions to the economic recovery in markets where we operate. We prioritized investing in network infrastructure, providing free devices in airtime to health workers, implementing track and trace technologies, accelerating support to governments and promoting digital and financial inclusion to help navigate the COVID-nineteen pandemic. To highlight a few of our key interventions in the year, We 0 rated person to person M Pesa transactions across most of our international portfolio. This impacted our revenue by ZAR2 1,000,000,000 It was clearly the right thing to do for our customers.
Alongside the Vodafone Foundation, we recently announced an R87 million financial pledge to support the rollout of cold chain technology and provide logistics supports to ensure the safety delivery of COVID-nineteen vaccines through our M Vaccination platform. On the 1st April 2020, we cut data pricing in South Africa to improve accessibility. This had an impact of ZAR3 1,000,000,000 on service revenue. Meanwhile, 15,500,000 customers in South Africa took advantage of Connect. U, Our 0 rated access platform, which provides a wide range of websites and services, including jobs and learning portals and discounted offers for job seekers and poor communities.
That's, of course, all free. Our eSchool program has over 1,000,000 registered learners. We also provided significant discounts to universities and schools so that lessons could continue online. Importantly, we believe that our purpose is aligned to the new normal with connectivity and financial services acting as enablers of inclusion and economic growth. Let's turn now to the Group financial highlights for the year.
Considering the magnitude of challenges arising from the pandemic, the data price cuts we affected in South And the zero rating of person to person and peso transfers across our international markets and the impact of the deletion of customers Due to the biometric customer registration in Tanzania, it is really pleasing that we were able to deliver such a strong Financial performance. Group revenue increased 8.3 percent to ZAR98.3 billion And service revenue grew 5.8 percent to ZAR 77.6 billion. The group performance was underpinned by South Africa, which captured increased demand for connectivity, particularly in prepaid and Vodacom business and demanded our new growth streams such as IoT and also the demand for our new growth themes such as IoT and Financial Services. Also in line with our expectations, our international Recovered in the second half of the year. As a group, including Safaricom, we connected close to 124,000,000 customers, an increase of 7.1% year on year.
Our financial service customers increased 12.9% to close at 58,000,000 customers, making us the leading fintech operator on the continent. We invested ZAR13,300,000,000 in network infrastructure during the year, ensuring the resilience of our networks and to cope with the significant increase in mobile data traffic volumes to keep families connected, enable businesses to operate, facilitate online learning and assist governments in providing critical services. ZAR10.1 billion was invested in South Africa alone. EBITDA grew by 4.5 percent to ZAR39.3 billion in the year, which tested the resilience of our business model and rewarded consistent execution. Headline earnings per share was up 3.7%, subdued by the performance of our international operations and the impact of free person to person and PASA transactions on our Safaricom results.
On the back of the resilient business performance, the board resolved to declare a final ordinary dividend of $0.410 per share. This brought our full ordinary dividend to $0.0825 per share, up 5.1% from last year. Vodacom has a track record of innovation and evolving its business model to capture growth. We are already positioned to generate a 3 60 degree view of our customer, enabling an ecosystem approach to product development, which I set out on this slide. In Vodacom Business, our sector leading SD WAN connectivity solution, our IoT services, cloud hosting and security capabilities supported accelerated growth in the year.
In the financial services space, we believe that the merchant capabilities are core to a fintech business model. Our Vodatrade solution seamlessly connects trading partners, while our lending products leverage our integrated approach across Vodatrade payments and point of sale. In the consumer financial services sector, our very successful Airtime Advanced business has created a platform to launch Voucher Advance. This product provides a no fee, no interest advance to customers whether they are craving a quick meal with our advanced me and Nando's burger or needing new appliances. Pulling our merchants and consumer capabilities together and launching them into the next 3rd, we are very excited to launch Vodou Pay in the coming months.
FarooPay will also act as a springboard for our M Pesa aspirations. More on this later. In digital, our offerings span across key industry verticals. We have partnered with the African Union to make our digital infrastructure available for the distribution of COVID-nineteen vaccinations across 55 countries through our M vaccination platform. Pulling these products together, enhancing the customer experience He's our behavioral loyalty program, Vodafax.
This program, like many of our other products, is powered by our in house business intelligence and AI capabilities. And where it will accelerate our return profile, we are willing able to partner with global tech leaders. Our strategy, which comprises 8 connected pillars, is designed to deliver Exceptional value to our customers. We implement these pillars in our strategy through our system of advantage, which is designed to grow with our customers And we strive to be a strategic partner of choice and an integral part of their lives, homes and offices. In this slide, we set out our consumer system of advantage.
As you can see, it incorporates a multiproduct approach. Our future of the home strategy integrates our customer propositions, embedding Vodacom in the lives of our customers as we strive to go further. Core to our business is driving data penetration. This is supported by smartphone adoption, which we're accelerating through partnerships with global tech firms an innovative financing solutions. Then on 5 gs, leadership in the space enhances our customer proposition.
Complementing our data penetration strategy is our progress on the reasons to consume, which we support through our digital platforms. These span across the entertainment verticals with a number of strategic partnerships providing an exciting future growth path. As we unlock our growth potential beyond mobile, our focus on financial services is extremely important. Our existing range of services will be complemented by Vodou Pay and our Vision 2025 view of M Pesa. I will talk more to these growth factors later.
Pulling all of these services together is our big data capability and the 3 60 degree view of our customers. This view provides us with more than 700 unique customer insights and when coupled with AI, allows us to personalize to the segment of 1 in mobile and in with our new products. We call this capability our global recommender It will support the generation of next best activities for our customers. Our behavioral loyalty program cuts across our products, incentivizing and rewarding engagement. Since its launch in September 2020, the program has attracted 24,000,000 unique customers in South Africa, who earn, bank and spend their Vodacom via our My Vodacom app.
We have given away a retail value of over ZAR6.5 billion in lifestyle rewards to our customers. Moving on to Vodacom Business. We introduced a dedicated strategic pillar for this segment in the current year. This recognizes the contribution and growth potential of Vodacom Business. Our strategic goal is to partner with businesses and accelerate their growth, transforming their operations through digital technology.
We implemented this strategy through our system of advantage. We focus on providing the best connectivity to businesses through fixed line and mobile services like SD WAN, as we transition to our gigabit infrastructure. In addition to connectivity, our tailored service offerings are class leading, I play in high growth areas like cloud, hosting, managed security, managed services and IoT. These solutions are enabled and enhanced by our subsidiaries as reflected on the slide. Our IoT business is delivering rapid revenue growth and important environmental savings for Vodacom and our customers.
Importantly, the addressable market for our IoT businesses has scaled meaningfully in the current year as we are now a preferred supplier to the broader Vodafone Group and all its partner markets. Shifting to the SME segment. This market requires a dedicated and purpose led approach. SME is a very big market opportunity for us with over 2,000,000 SMEs in South Africa alone. Most of these SMEs operate in the informal sector, which is key to our economic growth outlook.
In the financial services space, where we compete across the value chain, we believe that the merchant capabilities our core to a fintech business model. And as such, are embedded in our Vodafay and M Pesa journeys that I will discuss in more detail later. As we implement our system of advantage to deliver exceptional service to our customers, we put an equal focus on strategic considerations to improve our overall customer proposition, return on capital employed and value creation. For instance, in the tower space, we seek We for instance, in the tower space, we see scope to extract more value through optimization. We are evaluating the connection of tower companies to support this optimization journey.
To be clear, this does not mean that we are selling our towers, but rather creating focus and partnership to optimize our costs and gain efficiencies. On the right hand side of the slide, our infrastructure statistics highlight the scale at which we operate across our markets. On the theme of scale, we focus on building platforms that can accelerate our Business Intelligence and Data Insights are making the difference in our CapEx planning, risk management, behavioral loyalty, Customer services and product recommendations. In the fiber space, we intend to scale our portfolio both in South Africa and across our international footprint. We are looking at various options, including dedicated fiber units and intend to provide more color on this in the coming months.
More broadly on M and A and partnerships, COVID-nineteen reaffirmed the strategic importance, scale advantage and potential social good from aligning with the right partners. Our approach to partnerships is not limited to the well known hyperscalers. In fact, our African grown solutions A very have a very exciting global potential as evidenced by our IoT and M Vaccination platforms. Securing spectrum is critical to our business model. We have demonstrated an ability to manage spectrum scarcity through roaming deals and selective M and A across our portfolio.
In South Africa, the allocation of high demand spectrum Remains critical to the outlook for data pricing. Finally, on costs, we remain disciplined, and we are using our big data platforms to drive efficiencies. We have successfully incorporated robotics process automation and chatbots into our customer service channels to half core volumes over the last 3 years. And as mentioned previously, our IoT business is driving meaningful energy consumption savings across our networks. If If we look at our business through a geographical lens, the acquisition of Safaricom and the historic growth of our international operations has given us an opportunity to diversify while still capturing the growth opportunities in South Africa.
On the service revenue bar chart with Safaricom represented at 100%, South Africa's sterling performance is clearly evident, adding ZAR3.7 billion of service revenue in the year. Our international business in Safaricom had a difficult year. However, if one looks at the scale of Safaricom with service revenue of 37,600,000,000 It is clearly a formidable business. From an operating profit perspective, South Africa's contribution increased to 74% with the group delivering normalized growth of 2.2% year on year. South Africa's growth was diluted by International and Safaricom, which We're materially disrupted by COVID-nineteen and free person to person and pace of transactions.
We are, however, very optimistic about the growth prospects of these segments. And from 1st January 2021, we resumed person to person charging across all markets on a significantly bigger and peso base. When looking at our customers, just on 65% of our 124,000,000 customers are outside South Africa. As a group, including Safaricom, we added 8,200,000 customers this year. Shifting now to a product lens.
This slide sets out the contribution of our high growth new services to each of our geographic segments. New services comprise IoT, fixed, financial and digital services. These services follow a similar product lifecycle. This starts with innovation, which is driven by dedicated innovation hubs and is data driven. M Pesa Africa is a good example of an innovation hub, which coordinates product development and expansion across the portfolio.
Services are then integrated into our product ecosystem and system of advantage and scaled to support our growth ambitions. Over the coming years, products like financial services will move into the optimized phase. This optimization can take different forms, but could include structural separation and potentially partial monetization to better reflect the underlying value of these assets. In South Africa, close to 14% of service revenue is attributable to new services. We intend to scale each of these new revenue streams into formidable businesses.
Across our international The contribution of new services is 27%, while Safaricom sets the benchmark and is closing in on 40%. Later in our presentation, Raisabe will provide you with an outlook for the growth of these new services and how this ties into our guidance. If we drill deeper into our product suite, our financial services portfolio is a clear differentiator. We have 58,000,000 financial service customers across the group, representing 47% penetration of our customer base. Financial inclusion is a key focus area for management.
And from this financial year, we have added financial inclusion into our remuneration scorecard. Including Safaricom on 100% basis, our financial services portfolios generates ZAR19.3 billion of revenue in the current financial year, contributing 17% of combined service revenue. Free person to person APACER transfers negatively impacted service revenue by ZAR 2,000,000,000. Our person to person intervention did, however, support midlife platform economics. These 3 person to person transfers created massive growth in transactional value across the platform.
We should see the benefits of these increased transactions into the new year. We now process a monthly M Pesa transaction value of $24,500,000,000 up 65 63.5 percent year on year. This platform expansion sets up a very exciting growth outlook for M Pesa. Then to enhance our disclosure on financial services, we have provided some color on a proportionate basis, which accounts for minorities and associate holdings. This is especially relevant when comparing fintech valuations to market cap.
On a proportionate basis, we generated ZAR10 1,000,000,000 of revenue in the year. This equates to 12% of proportionate service revenue. We expect this contribution to scale materially with Vodou Pay in South Africa. The low capital intensity profile of Financial Services means that it generates a higher profit margin than our core mobile business. In fact, 17% of our group's proportionate profit before tax comes from financial services at a margin of around 40%.
This equates to ZAR4.4 billion or close to $300,000,000 If this value is not recognized by the market over time, will need to look at ways to optimize this portfolio, including partial monetization to better reflect the underlying value of these assets. We are particularly excited about the upcoming launch of our lifestyle super app Vodupay. Vodupay will be supported by the world class technology of Alipay and 0 rated for consumers. Our super app will offer services ranging from loans and savings, seamless QR and person to person payments to entertainment and personalized shopping experiences. The shopping platform will host most of South Africa's leading retail brands across All key verticals.
We have also built out our merchant side of the platform with our own point of sale devices and FMCG trading platform called Vodatrade. This platform already processes ZAR200 1,000,000,000 of transactions in South Africa and will facilitate products like invoice financing. In addition, we provide merchant lending to our small business advances and our Vodaland product, where SMEs can borrow from R10,000 to R1,500,000, including supporting financial inclusion. Here is a video of what is to come, and please switch up the volume. I hope that gives you a sense of our excitement and what is to come from Vodou Pay.
Moving on to M Pesa, which is already Africa's largest mobile money platform. Over recent years, we successfully added and scaled new services onto the platform, including international money transfers, loans and savings. For example, in the current year, we facilitated nano loans of $3,300,000,000 through our Fulysa and Songhesha products. Our immediate priority for M Pesa is to scale and replicate the service offerings of our leading markets like Tanzania and Kenya into the rest of our portfolio. This initiative is being accelerated and directed through our strategic M Pesa Africa hub.
For example, Mozambique facilitated International money transfers of ZAR1 1,000,000,000 in the year and launched nano loans very recently. Looking into the medium term, the Vodupay App sets the bar even higher for M Pesa, and we intend replicating a lifestyle app approach across our M Pesa footprint. This ambition is captured in our 2025 vision for M Pesa, which is to develop the platform into Africa's clear fintech leader. Similar to our South African approach, we will be involved in the value chain connecting consumers and merchants. In Kenya alone, we already have more than 300,000 merchants today.
On the consumer side, our app is now live across all our markets And we will evolve with Mini App capabilities into a lifestyle super app. Reflecting back on the product life cycle I discussed earlier, We believe there is a very exciting scale opportunity for M Pesa, which given its margin profile should enhance the return on capital employed and create value for Vodacom. In South Africa, despite economic disruption and the substantial data price cuts in April 2020, We reported strong revenue growth of 10.3 percent to ZAR76.7 billion with service revenue growth of 7% to ZAR56.4 billion. Pleasing robust results were evident across all our segments. The key growth drivers in the year were Vodacom Business with customers growing at 11% and service revenue growing at 11.3%.
Our financial services portfolio grew revenue at 18.9% and prepaid revenue grew 8.5%. We captured the increased demand for connectivity and financial services as customers continue to work, entertain and educate from home. EBITDA grew 5.7 percent to ZAR30.7 billion, and Raisibei will unpack this dynamic for you later. The number of smart devices on our network increased 9.5 percent to 23,200,000 while the average Usage per smart device increased by an impressive 39% to 2.1 gigs per customer. On the regulatory side, we are grateful for the extension of the temporary spectrum, which has supported network capacity in the period.
We are ever very disappointed in the delay on the Spectrum ITA, and we are hopeful that the process can resume as soon as possible as we see the assignment of Spectrum being instrumental to data pricing. The pie chart on this side shows that each of our customer segments delivered service revenue growth in the period, which is particularly pleasing. This broad based growth is It's supported by our strategy to introduce 1 more service to customers and build our diverse and sustainable revenue streams. The strategy is paying off and we are seeing strong growth across our new revenue streams, which contributed 14% to service revenue growing at 17% year on year. Notably, IoT revenue grew 32.5 percent with fixed revenue growing at 17.7% And as mentioned, financial services growing at 18.9% in the year.
Our international operations reported muted service revenue growth of 1.6% in the year due to the COVID-nineteen effects, our zero rating of person to person and peso transactions and the impact of service barring in Tanzania due to biometric registration compliance. Positively, normalized service Revenue improved in the second half of the year, and we delivered 4.3% growth in the 4th quarter. Our customer base increased 3% to 39,700,000 Despite the deletion of 29,000,000 customers in Tanzania due to biometric registration. Data services remained a key area of growth with data revenue up 11.8% to ZAR4.2 billion. We continue to drive the adoption of affordable smartphone devices and grew the smartphone base by 8% in the period to 11,000,000.
Only 32% of our customers are currently using a smartphone in our international markets, highlighting a material untapped opportunity. And Payside revenue was impacted by the free person to person transactions, but still grew at 13% to ZAR4,500,000,000. In the Q4, with the reimplementation of person to person fees, APESA revenue grew 21%. We added $1,400,000 in peso customers in the period to $16,100,000 a growth of 9.6%. EBITDA was up 1.2% as margins recovered in the second half of the year.
The full year margin was flat year on year, reflecting disciplined cost containment despite inflationary and the COVID cost pressures. Safaricom results reflected a challenging year We're impacted by depressed economic activity and free person to person and peso transactions. Service revenue and EBITDA Declined 0.3% and 2.8%, respectively, in the financial year. Positively, free person to person transfers Supported accelerated platform growth for M Pesa with customers up 13.6% and the total annual value of M Pesa transactions up 58.2 percent to an equivalent $202,000,000,000 This platform growth and the reintroduction Person to person fees on the 1st January 2021 resulted in M Pesa service revenue growth recovering to 21.2% in the 4th quarter. This represents a clear step change from the M Pesa revenue decline of 14.5% reported by Safaricom at its interim half yearly results.
Data revenue growth was an encouraging 11.5% in local currency with data customers reaching 20,000,000 4 gs and fiber to the home customer growth reflected increased demand for connectivity to work and learn from home. Finally, on the 26th April, Vodacom participated as a minority investor in a consortium controlled by Safaricom for a mobile license in Ethiopia. Shortly thereafter, we were confirmed as one of the 2 qualifying bidders. We await feedback from the regulator on the final outcome of this process. In this slide, we reconcile our purpose led business model with the well known ESG acronym and the United Nations SDGs, where we believe we have the most significant impact.
We strongly believe that improved connectivity is a powerful tool for achieving socioeconomic development and promoting sustainable growth. It is for this reason that Vodacom is guided by a clear social contract to build trust with our customers, I show fairness and inclusivity and maintain a reputation for responsible leadership and innovation. Our ESG standing was recognized by Sustainalytics and MSCI. In its March 2021 review, MSCI rated Vodacom as AAA, its highest ESG rating. I will now hand over to Raisibeh to take you through the financials.
Thank you, Shamil. Good morning, all. Overall, we have delivered strong results for the period given the backdrop of COVID-nineteen. A key highlight for shareholders is a full dividend of $0.0825 per share, representing growth of 5.1% on a like for like Also, as I will set out later, we have slightly upwardly adjusted our medium term targets. This is testament to our operational execution and financial position, both of which are a good context to navigate us through the Uncertainties of COVID-nineteen pandemic better than most sectors.
Moving to our financial performance for the year ended 31 March, our income statement sets out reported and normalized growth. I will primarily draw attention to the normalized growth numbers, Which provide better insights into the operational trends. The normalized growth rates are adjusted for ForEx fluctuations, M and A activities A major one off lumps and bumps. Pleasingly, revenue increased by 8.3% or 7.4% on a normalized basis, Supported by service revenue growth, which was up 5.8% on a reported basis and 4.7% on a normalized basis. Delivering revenue growth in this environment highlights an outstanding level of execution.
EBITDA grew 3.6% on a normalized basis At a margin of 40%. The EBITDA growth rate was slightly below that of service revenue growth, and I will Come back to this later. The reported growth on a net profit from associate and joint ventures of minus 15.6% Was affected by R745 1,000,000 prior year one off benefit for the M Pesa Africa joint venture acquisition. On a normalized basis, the net profit from associate and joint ventures increased by 3.9%. Headline earnings per share was up 3.7 percent to $0.0980 per share.
As set out on the previous slide, normalized service revenue growth for the group was 4.7% for the year. This slide focuses on a quarterly lens reflecting that normalized growth accelerated from 2.6% in the 1st quarter to 7.8% in the 4th quarter. Our South African business supported the growth acceleration and delivered its best service revenue growth performance in several years. The result reflects delivery across all major drivers of the business, but especially the new services that Shamil discussed earlier. In the Q4, growth in South Africa accelerated to 8.5% supported by mobile contract revenue in Vodacom Business And our successful summer campaign in the Consumer segment.
Shifting forecast to international and as guided, normalized service revenue growth rates Improved in the second half of the year. In the Q4, the reintroduction of P2P and pesa fees Supported and improved normalized performance of 4.3%. On a reported basis, FX tailwinds in the first half of the year reversed in the second half. And as a result, international 4th quarter service revenue Declined by 3.8% on a reported basis. Moving to EBITDA.
Group EBITDA grew by 3.6% On a normalized basis, South Africa posted EBITDA growth of 5.7 percent with margin contraction of 1.7 percentage points. On an adjusted basis, growth of 7.2% was ahead of service revenue growth of 7%. International normalized EBITDA declined 2.2% with the margin remaining flat. There was a better trend in the second half versus the first half as we guided with respect to international. Shifting the forecast to South Africa, I would like to illustrate the bridges from reported to adjusted EBITDA and operating profit growth.
EBITDA growth was impacted by a few one offs and anomalies that I would like to highlight. The one offs included a credit of R142 million from the remeasurement of the obligations for the loyalty program In the current year, R177 1,000,000 IFRS 15 adjustment in the prior year. Both this one offs positively impacted the reported growth rate and as such we removed them in our adjusted growth rate bridge. Then there were 2 material growth variables that we expect to normalize into the coming financial year. Firstly, EBITDA growth was impacted by a roaming agreement related to 5 gs.
As such, we see this as an investment in our future growth. Separately, the illustrated 1.2% impact related to bad debt encompassed both specific provisions And higher expected credit losses as a result of COVID-nineteen relief measures that we implemented. The year on year increase was R386 million, which is still relatively benign given our history of very low bed deaths. Adjusting for the one offs, roaming and bad debts, EBITDA growth was 7.2%, in line with service revenue growth of 7%. Reported operating profit growth was also impacted by the one off impact that we called out for in EBITDA.
In addition, operating profit growth was diluted by higher year on year depreciation. Depreciation increased double digit as a result of CapEx And Asset Mix. On an adjusted basis, operating profit growth was 7.3%. Staying with South Africa, by observation, reported EBITDA growth was much stronger in the first half at 9.9% Compared with 1.8% in the second half. To provide more context, the first half was positively By the lower spend on OpEx due to COVID-nineteen.
In addition, the one offs mentioned in the previous slide added to the stronger growth. This was offset by the impacts on growth related to the roaming agreements and increase in the bad debt related to COVID-nineteen And notably, the bad debt increase was higher in the first half than in the second half. The second half saw savings from OpEx deferral As publicity spending picked up concurrently with more stringent lockdown restrictions being lifted. The impacts from the roaming agreements and the bad debts related to COVID-nineteen remained. Moving to cash flow, This chart sets out where we generated and applied our cash flow and how free cash flow changed year on year.
Of the R39.3 billion EBITDA that we generated, R13.3 billion was invested into CapEx And a further 4,300,000,000 was applied to lease payments. From operating free cash flow of 22,000,000,000 We paid cash taxes and finance costs, but were a net receiver of dividends. Our free cash flow for the year was R15 1,000,000,000, A very sizable number in the context of the listed companies on the Johannesburg Stock Exchange. In terms of year on year growth, Operating free cash flow increased 1.1% in this period with EBITDA growth of 4.5% offset by a working capital outflow. The working capital movement largely relates to South Africa, which posted a broadly neutral working capital movement in the current year.
From a free cash flow perspective, we reported a decline of 8% year on year and this growth rate was materially Impacted by a €1,100,000,000 special dividend from Safaricom, which we received in the prior year and higher cash taxes Related to payments for the current year's tax assessments. Adjusting for the Safaricom special dividend in the prior year, Free cash flow declined by 1.2%. Our total dividend for the year is $0.0825 per share, Supporting a dividend yield of 6.5% in a period where most corporates have postponed dividends. In the prior period, our dividend included a special dividend of $0.60 per share related to Safaricom's flow through. On an annual basis, our ordinary dividend was up 5.1%.
Importantly, Both the core consolidated businesses and Safaricom contributed to growth, and we are again very pleased that EBITDA growth filtered through to dividend growth. Our balance sheet remains one of our key strengths. Pleasingly, we have maintained our net debt to EBITDA ratio At 0.9 times year on year despite our accelerated network investment and COVID-nineteen interventions. Our leverage ratio of 0.9 times is below that of our telco peer group, while our internal leverage threshold of 1.5 times Net debt to EBITDA provides comfort on stress testing scenarios given a still uncertain economic outlook. We have also carefully managed our debt profile.
Our near term debt repayments are skewed to rent denominated Vodafone Term Loans, which we expect to be refinanced favorably. More than 90% of our debt excluding leases is rent based, Limiting our exposure to rent moves. From an interest rate perspective, our debt structure is split 61% fixed and 39% floating rates. And if we exclude leases and forecast on financial debt, the fixed component reduces to 47%, While floating rate debt is 53%. This balance protects us against significant adverse interest rate movements, But allows us to participate in lower interest rates going forward.
This brings us to our medium term targets. At our interim results in November 2020, we reiterated our medium term targets, citing our ability to operate in this new normal. Looking ahead, we remain mindful of a still uncertain economic outlook, but believe that Our system of advantage supports a robust growth outlook. On this basis, we reiterate our mid single digit growth target for We upgrade our target for operating profit from mid single digit growth to mid to high single digit growth. And this reflects improved prospects for International and Safaricom in particular.
Our group capital intensity ratio remains In a range of 13% to 14.5% of revenue. We have also provided some color on the forthcoming financial year FY 2022. We expect South Africa to deliver service revenue growth in line with our medium term target, While the operating profit growth profile will likely be impacted by the phasing of growth from the financial year 2021. Notably, the growth rate in the first half was stronger than that of the second half. For international, we expect M Pesa to support a recovery And see operating profit growth tracking ahead of the group target.
At the group level, we expect the operating profit growth rate For FY 2022 to accelerate into FY2023 and FY2024. Ilya Shah Mill talked to you through a product lens of Vodacom and set out the beyond mobile split of our service revenues. In my final slide today, I would like to reconcile our medium term target growth with the shape of our business in the years to come And in particular, our ambitions around Beyond Mobile. In a consolidated on a consolidated basis with South African International Scope, we see our Beyond Mobile revenue contribution increasing from 17% to around 25% to 30% by the financial year 2024. And by 2026, there is scope for these revenues to exceed a 30% contribution to our consolidated service revenue.
Before handing back to Shamil, a quick reminder that you can post your questions to Shamil and myself in the space provided on the webcast link. I thank you, and I now hand over to Shamil to take you through the group priorities.
Thanks, Raisibeh. To conclude our presentation today, I would like to highlight Our 6 key immediate priorities. Firstly, on spectrum. Despite our disappointment in the delay to the ITA process, We remain optimistic that South Africa will reach a consensus on the growth potential from issuing high demand spectrum. Dealing with the effects of the COVID-nineteen crisis will, of course, be a key priority for us, and we will continue to support our staff, partners, governments and customers.
Transforming our revenue into new verticals such as financial and digital services, fixed and IoT will continue to be a focus area. These new verticals together with the platforms they require are complementary to our traditional revenue streams, but can also further leverage from our It can also be further leveraged from our strong brand reach and reputation in the countries where we operate. Our industry leading applications of big data and machine learning continue to differentiate us from our competitors. We continue our focus on our digital Vodacom project, and we are seeing good results so far. The Opportunity for growth in FinTech in South Africa and M Pesa is significant and remains a key priority for us, and we are very excited for the upcoming Super App Launch.
Data monetization in all our markets remains a priority, ensuring that our capital investment In networks across our footprint yields the desired results. This concludes our presentation for this morning. Thank you for joining us. Raisibeh and I will now be taking questions.
Good morning, Raisibeh and Shamil on behalf of everyone who's Joined us online. We have a few questions coming through from the webcast. The first one comes from John Kim from UBS. Two separate questions. First one on Ethiopia.
Please can you provide an update on Ethiopia, So timing on any decision and the consortium structure? And then as a separate question, when can we expect The implementation of the Alipay JV or Vodopay in South Africa. Many thanks, John.
Yes. So I think on the Ethiopian process, effectively, we've submitted the bids. As you would have seen from the media reports, We will confirm this one of the 2 bidders that have qualified. We now, of course, wait for the final outcome from the Ethiopian Communications Authorities, which should be any day now. So I think that's where we are.
And of course, we're quite hopeful given that we have put our best foot forward as a consortium. How the consortium is made up is 56% owned by Safaricom, 6% by Vodacom, 25% by Sumitomo, the Japanese conglomerate and 10% by CDC, the U. K. Sovereign Investment Fund.
And then a question on the timing of the Alipay Vodapay app launch in South Africa.
So it will be Q2 financial year soft launch and then probably full launch or hard launch in Q3.
Then what looks like a follow-up on Vodapay itself, a question from MoneyWeb. Did you look at platforms like Tencent And other Chinese based tech companies when it came to modeling Vodapay. And will Vodapay be a closed ecosystem? Or will it be interoperable with other platforms?
So we looked all around the world, and we looked at all the different options From the west to the east, we did look at $0.10 and so on, but they didn't have any The ambition is to basically expand into Africa. The Alipay platform, it took us It was a sort of difficult conversations with them initially because they don't normally unless they take equity, they don't normally allow to be utilized. And I think after 2 years of negotiating, we finally reached agreement with them. And of course, I'm very excited because it's the first time that the Alipay platform is being launched where they don't have equity. And it's the first time that, of course, it's going to be launched on the African continent or outside of Asia.
So very, very exciting, 1,500,000,000 users, the most sophisticated platform in the world. And so I think it's going to be quite transformational for the fintech environment in South Africa.
Still staying on Vodapay, a question from Slava from Goldman Sachs. How is Vodapay reflected in your medium term guidance? And can you elaborate on the effects on both the sort of cost and revenue side of Vodafone?
So in terms of the medium term contribution from Vodafay, it is part of the Beyond Mobile that are reflected That 17% today, increasing to over 30% by 2026. And In that mix, the large proportion is financial services. What we see is that our financial services offering, both in South Africa and in the international markets, We'll benefit from further augmentation by the deeper product offering that comes with the super app. And some of the Type of offerings would have been reflected in the little video clip that you saw, which basically will be supported by having store value. So once you have store value, then we are able to expand more into e commerce and be able to transact across all the different platforms.
So today, South Africa Financial Services, contributes 4.2% Of our service revenue, but that 4.2% is growing as you saw from Sharmon's slides, 18.9%. So it is definitely growing faster than the rest of our businesses.
Raisabem, maybe sticking with you, a question from Merger Markets. What are Vodacom's plans for the €18,500,000,000 debt repayments that are due over the next 1 to 2 years?
So the debt profile, which is skewed to a shorter term, a large part of that was raised from Vodafone. So we, in the conversations with Vodafone for renewals in Components which are maturing soon, and we do believe that we'll be able to renew more favorably. I think one other opportunity that it will give us, it will continue to Give us a better opportunity to tap into the current low interest rate environment. So we showed in our slides that We have roughly 47%, 53% split between fixed rate and floating rate. And given the interest rate environment right now, it Actually, optimizes our cost of funding.
So we are in conversations, to continue and look into that. But the good thing is that The facilities that come from Vodafone are Ausuran based.
Then a question from Alastair from New Street Research. In the Q4, service revenue growth was up 9%, despite lockdowns only really impacting for 1 month. In comparison, Your prior quarter was around 5%. So what drove that stronger performance in the Q4, that acceleration? And how should we think about that over the next couple of quarters?
Yes. So the So I think what generated, of course, is acceleration of all the different services. So you saw a nice pickup in terms of Financial services going into the year or in the last quarter, but also a better monetization in terms of Vodacom business, Some roaming revenue coming through in the last month of the year with CELSI revenue now starting to come through. So that will also remember the CELSI roaming or the new CELSI roaming arrangement will only really hit us in We already impact the new financial year, so that benefit will flow through into the new financial year as well. Another big option was also voice.
Revenue growth was very strong during the quarter. So these all contributed to an exceptional set of results in the 4th quarter.
Then we have a few questions from SIB. Let me try to peel them off 1 at a time. So firstly, on M Pesa Africa, are you actually likely to spin off M Pesa Africa? And if so, would you sell part of a stake to
I think the where we're standing at the moment is that to be honest we'd like the market to give us credit for our financial service assets. And we're not in a position yet where we think the time is optimal to sell or even monetize a portion of the asset because we believe there's still a lot of growth left in M Pesa. But certainly something that is in consideration, we have structurally set up in the different markets M Pesa and Financial Services into separate entities. So it does give us optionality going forward, But we would, of course, prefer that the market recognizes the value of these financial service assets. If not, then we will consider, Do we at least monetize a portion of these assets going forward?
Which exact structure will it take? Will it be in the countries? Will it be And then
And then another one from SIB and then we can move on. We've got a few others. Are you still working with Alipay in the development Of your super app and then just a little bit about color around what sort of growth areas we're looking to invest into, so this is CapEx,
Yes. So I think I mean, of course, we're still busy. The super app will launch, as we said. Q2 soft launch, Q3 hard launch is what we're planning for. That's of the fiscal year, of course.
And then what we so we have 130 software engineers hard at work at the moment. The we are already starting to test on the platform itself. And it's I think it's like opening up a box of suites. Every day, we discover some new capability, which we get very excited about. So we're quite excited about the platform and the capabilities that it will bring for us.
So yes, very much on track. And a lot of retailers you'll see in the coming days, You'll see lots of announcements from various retailers that are coming on to the platform itself. So very, very exciting in that regard, particularly because of the high AI and machine learning capabilities of the platform itself. In terms of investment going forward, of course, our we always continue to invest in the core, which is the network itself. As data expands, it's the investment into fiber or backhaul fiber.
It's the investment into the network to keep up with capacity. It's also investment into coverage. But we are diversifying more CapEx into IT capabilities. We've invested quite heavily into big data, into customer value management, into loyalty. So our IT spend over the last couple of years and going into the future will continue to reflect investment into these new businesses, of course, Substantial investment into financial services and then pace that going forward.
But to put into perspective, these are less capital intensive businesses compared to core mobile. So they do give you a better return on capital profile.
And I guess maybe just to add to that is the consistency of our investing profile. So we spent CHF 13,300,000,000 this year And we still guide on spending within the CapEx intensity of 13.5% to 14.5%. And we believe that A consistent pattern of spending is probably better than where you are kind of changing the pattern. So that is still what we expect For the next couple of years.
Then a question from Ziyad at from Nedbank. Could you provide some additional insight into the logic for incurring 5 gs roaming costs right now? Also, how do you see these costs evolving over the medium term? Thank you.
Yes. I think what we've done is, of course, entered into A roaming arrangement was liquid, particularly around 5 gs. And I think the important part for us is to have Certainty. So effectively, given the delays in spectrum, given the delays in what's been going on, We had to make sure that we have continuity, and we see 5 gs as important to be able to cope With data traffic growth, remember, it's also key that we get 5 gs launched in South Africa and across all our markets because 5 gs is It will drive down data costs. It gives you the ability to do unlimited type offerings, which are not ideal on a mobile network today.
So 5 gs has to be part of the investment profile going forward, especially if One is to cope with the level of data growth. And so entering into a roaming arrangement is also an insurance policy for us to ensure that the, let's say, the growth potential of the company is assured.
Then we've got a question from Nadim from SBG Securities. Noting that The quarter on quarter momentum in customer adds was modest. Is this a function of optimizing gross additions Or a result of a normalization in demand?
Yes. So I mean we've been trying to I take it we're talking about South Africa specifically.
Yes, skewed to South Africa.
Yes. So in the international markets, of course, international markets We're impacted by biometric deletions through the year. So that had a big impact on the overall growth numbers, although You'll see we still grew customer numbers quite impressively. In South Africa, we've been doing a cleanup, specifically around gross adds and trying to reduce the number of gross adds and eliminate what I call the washing machine effect or the fictitious gross head numbers. And so that has been a strategy through the year and will continue to be a strategy going forward.
What we instead focus on for us is the one Manecte base, which continues to expand because that's actually what drives the revenue. And so that continues to grow and we're quite pleased about that.
We do have a couple more questions, but unfortunately, we're out of time. But one I'd call out from a shareholder, Cohen, who just says congratulations Excellent set of results. Did ask for a quick word on the impact of the South African government contract, That going out to tender and then maybe, Shamil, you can wrap up with a couple of concluding points.
Sure. So I think On the contract itself, it's about ZAR 1,000,000,000 contract. It came out to tender. Essentially, All 4 operators basically were selected onto a panel. And each department can choose from within the office that have been approved by the by Treasury.
So I think it's 483 departments. So Of course, it's 483 times that people will have to elect which partner they're going to have to choose. So We, of course, are putting all efforts in to make sure that we can retain and re sign customers on that contract given the compelling offers that we've put forward. Going forward, I think basically firstly, I mean, it's been an exceptional set of results and we're quite pleased about The set of results given the tough COVID period and of course the impacts of price decreases, free P2P, I think in that context, really an excellent set of results. What's very encouraging going forward is we are expecting A step up in performance both in the international markets and in Safaricom premised on the continued data growth but also premised on The on M Pesa continuing to grow strongly, and you'll see we see the 4th quarter results as a prelude into the Q1.
And that's why we've decided to upgrade guidance, and so we are planning for a strong here going forward.
Good. On behalf of everyone, thank you very much for your time. We'll wrap it there.
Great.
Thank you.
Thank you.