Good day, ladies and gentlemen, and welcome to the Vodacom Group Limited Results Conference Call for the 3 months ended 30 June 2021. Vodacom Group's CEO, Shamil Juszap, will host the conference call. Before I hand the call over to Shamil, I would like to ask that you refer to and familiarize yourself with Vodacom's forward looking disclaimer. This is set out on Page 15 of the trading update and can be located on www.vodacon.com. Alternatively, if you'd like a copy of the trading update sent to you.
Please e mail Investor Relations website atvodacomirvodacom.co.za. All participants on this conference call are in listen only mode and there will be an opportunity for you to ask questions later in the conference. Also note that this event is being recorded. I would now like to hand the conference over to Shamil. Please go ahead, sir.
Thank you, Chris. Good afternoon and good morning to those joining us in the call from the U. S. Thank you for joining our Q1 trading update call for the financial year 20 I'm joined by our group CFO, Raisim Watati as well as our Head of Investor Relations, JP Davids. We are deeply saddened by the recent unrest in South Africa and related tragic loss of life.
Our purpose set business model means that we will work closely to support South Africa's recovery was also doing everything we can to keep our customers connected. Through the Vodacom Foundation's Disaster Relief Fund, we provided support including food relief parcels to communities affected by the social unrest. We also stepped up To provide relief in Cape Town following the fires in April and the volcanic disasters in Goma DRC during May. In addition to these relief efforts, we have prioritized assistance to governments and communities to enable more Africans to be vaccinated. In April, we partnered with the African Union to accelerate the COVID-nineteen vaccine rollout through our m vaccination platform that manages appointments and stock Readiness and the logistics chain around the vaccine distribution.
In South Africa, the National The pledge made by ValuCom and by the phone during the quarter to provide logistics support and cold chain technology to deliver COVID-nineteen vaccines to underprivileged and rural communities in the DIC, Lesotho, Mozambique, South Africa, Tanzania and Ghana. Alongside our social contract initiatives, we achieved 2 significant strategic milestones in the quarter. In May, our consortium led by Com was awarded a mobile telecommunication license by the government of Ethiopia following a contested international bidding process. We are honored to be part of this powerful consortium with an effective 6.2% direct stake and additional exposure to our associate holding in Safaricom. We look forward to providing world class services to the people of Ethiopia.
And in June, we announced exciting progress on our African Super App Product Paint, more than 70 merchants have already joined our Vodafone ecosystem ahead of its highly anticipated launch in the coming months. We see the super app as a precursor to M Peso's evolution, supporting accelerated growth across our financial service businesses and assisting us in connecting the next 100,000,000 customers so that no one is left behind. Moving on to the trading update for the quarter, our performance is characterized by same growth in South Africa and a strong performance across our international markets. On a normalized basis, which excludes the impact of foreign currency, We delivered strong service revenue growth of 7.8% in the quarter. The growth was supported by an acceleration across our international markets and strong growth In new services service areas, that includes fixed IoT and financial services.
Our financial service portfolio delivered a particularly strong result in the quarter with both South Africa and M Pesa contributing. Group Financial Services growth was up 33.9% on a normalized basis and contributed 9.8% of Group Service revenue. This excludes any contribution from Subaricom. Normalized group revenue growth for Sport income of 2%, our fastest growth rate in a decade. On a reported basis, the rand sharp recovery in the quarter impacted our results.
Notably, the rand appreciated by approximately 20% against the basket of our international currencies, generating a material foreign exchange headwind. Despite the said ring, we reported revenue growth of 9% to ZAR24.8 billion. Then on CapEx and to further enhance customer experience, we invested ZAR3.4 billion in our network across the group in the quarter, including the expansion of 4 gs coverage, speed and capacity. Shifting now to South Africa, service revenue increased 5.2% as people continue to work, educate and learn from home. Revenue increased 13.2% supported by equipment sales as we lap the impact of retail restrictions in the prior year.
In the contract segment, Vodacom Business delivered strong growth supported by work from home solutions. In addition to mobile, Vodacom Business delivered Excellent growth across wholesale cloud and hosting, security and IoT to report a 14.1% revenue growth. IoT revenue increased 45.5 percent and we now have 5.7000000 IoT connections. In the prepaid segment, mobile customer revenue increased 1.8 percent supported by our initiatives to manage the numbers, number of days the customer remains active on This growth was achieved despite the base effect of a strong quarter in the prior year. We added 532,000 customers In the quarter, it was 15.1% growth in the customer base.
The strong growth rate impacted the year on year ARPU trend. Prepaid ARPU was down 3.5% quarter on quarter as we completed the price adjustments agreed with the competition commission And faced challenges to the and faced challenges to the wallet, which impacted spend potential. Adjusting for these quarter on quarter impacts, our underlying prepaid ARPU increased 0.5% from the 4th quarter. Data metrics were robust given the substantial base we were lapping. Data traffic increased 8.1% with the prior year
up 97.7%, so very strong comp that we were
batting against. 7%, so very strong comp that we were batting against. Smart devices on the network increased 13.3%, while 4 gs customers increased nicely, up 26 8% to $16,400,000 Financial Services in South Africa continued on its growth trajectory with revenue increasing 19.1% to ZAR0.6 billion for the quarter. Airtime Advanced amounted to 46% of total prepaid recharges versus 38% in the prior year enabling customer convenience. Our insurance revenue increased 13.4 percent with policies up 14.8 percent to 2.2000000 dollars as we continue to expand our portfolio of products.
From a CapEx perspective, we invested 2,900,000 in South Africa to support the demand for data. And then on to our international operations. We delivered a meaningful acceleration in normalized growth supported by M Pesa. Normalized service revenue was 13.5% in the quarter compared with a decline of 1.9% in the prior year financial year. At VASA revenue increased 43.2% as we captured platform economics following our COVID-nineteen intervention on a free person to person transfers last year.
Our pace of customers increased by 14.3 percent to $16,800,000 representing 48% of our international customers. Our phased ecosystem, including Safaricom, processed US25 $1,000,000,000 a month in transaction value in the Q1, up an impressive 62.6%. APACER now represents 23.2% of our international service revenue following the strong growth in the quarter. Product development for M Pesa continues coordinated by our strategic joint venture, M Pesa Africa. A good example of this is Safaricom's recent launch of the M Pesa Super App with many app capabilities.
We have replicated this app's progress across all our data markets also in leveraging the learnings and capabilities of the Vodafone Super App. Data services also contributed to growth with normalized data revenue up 13.9% and data traffic up 27.3%. We added 207,000 new customers to end the period at 20,900,000 data customers. With just over 30% of our customers currently using a smartphone across our international markets, there is still a massive untapped opportunity in the data space. On the regulated front, we are grateful for the expansion of the temporary spectrum in South Africa, which has supported network capacity in the period.
We are, however, disappointed by the ongoing delays to the allocation of high demand spectrum. We are hopeful that Iqasa's Mediation process can find a timely solution, and we, as Vodacom, are committed to this process. We see the assignment of Spectrum being The mantle to data pricing dynamic of our largest market. Just wrapping up my review with A few words on the outlook. Dealing with the effects of the COVID-nineteen crisis and the added burden of several unrest in South Africa will of course be key priorities for us And we will continue to support our staff, government and customers.
From a strategic perspective, we are very excited about implementing our system of advantage, which is designed to meet our customers where they are today and grow with them as we strive to be a strategic partner of choice and an integral part of their lives, Homes and Offices. Our strategy sets out our growth path for traditional mobile business, which is then enhanced by new areas like fixed, Digital IoT and Financial Services. Before we open to questions, I will hand over to JP to set the scope for the Q and A questions. Thank you, Chanel. Hi, everyone, and thanks for joining the call.
As a reminder, we did not disclose margins or profitability metrics in our quarterly trading update. For our outlook and targets related to operating profit, please refer to the disclosure we provided with our full year results, which were announced in May. And then finally, the results of our associate investment in Safaricom are disclosed on a biannual basis and therefore not included in this quarterly update. With that, Shamil and Rais Debbie are ready to answer any questions you may have. Chris, over to you.
Thank you very much. Our first question is from Shindran O'Daya of Nedbank CIBC. Please go ahead.
Hi, good afternoon, everyone. Thank you for the opportunity to ask some questions. I've got 3 from my side, if I can. First one Just as a clarification in it, I wanted to confirm your other service revenue line, that is where your roaming revenue from the rights of Telsey and Telecom, along with your financial services and IoT revenue sets. And your non service revenue line is where the leasing revenue from rain and hopefully liquid sits.
If that's the case, It looks like your other service revenue grew really well. So my question is, is the Cell C roaming revenue now coming in and how big is an impact Sure. Is that going forward? And secondly, the leasing revenue from liquid, If that sits in the non service revenue line, it doesn't look like it's come in. So just wanted to get And some clarification on timelines on when you can see that coming in.
Second question also related to Somewhat to liquid is how much of your traffic is being carried on liquid and range network this quarter versus last year's Quarter 1. And then the last question is your fixed service revenue line grew really strongly. I'm assuming this is fiber. So just wanted an update on your fiber plants because we saw CIBH's Price issue and its plans to lower debt. So does this asset look a little bit more sexy and attractive to you and within your 5 year expansion plans?
Thanks very much. Prashant, thanks for the questions. I'll help with the clarification question and then hand over to Shmuel and Debbie, for the more detailed questions on liquid rain traffic and the fixed line aspirations. Just in terms of clarification, you're broadly right in terms of other service revenue. So yes, that includes IoT.
Yes, that Wholesale revenue, but it's not all of the financial service revenue. Actually, The majority of financial service revenue will serve within the customer service revenue, both within prepaid and contract depending on what type of Within that other non service revenue line item. To just round off on that, you're asking about the contribution The growth from Cell C, if we can sort of round it off by saying that the wholesale revenue growth In the quarter, added 1 percentage point to service revenue. So all else equal, we would have printed 4, you said we printed 5 because of the bump up in wholesale revenue, and that is captured within the other service revenue Line, as you called out. Let me hand to Jamil on liquid and traffic related questions and then on the fixed side.
Yes. So I mean just on the liquid, the liquid part is still getting very low traffic Because it's 5 gs roaming as such, and there's not a hell of a lot happening in that space As yet, it's still quite light. We have within the envelope that we have with rain In terms of commitments seek to maximize some of the opportunities Around traffic or we're paying for capacity that we're basically taking advantage of that more fully. So we have Optimized more where we utilize those agreements. Of course, we don't disclose the exact amount of traffic.
But it didn't have it's more most of it is within the end of what is already agreed, Yes.
The
Next question was on fixed and you're asking about fiber.
So remember when we have
Roughly about 100 and
Yes. The growth remains the growth in fixed remains very strong. We've been growing 70%, 80% over the last period Over the last year in terms of fixed deployment, both from an ISP perspective and the resale perspective as well as growth in terms of connecting the homes that we've already passed? So, you guys see that 145,000 that's Homes passed by your own fiber network that you guys have built out, right? Is that correct?
And then just If you can, I mean, CIBH, does it look a little bit more attractive for you guys to expand or you guys are comfortable with your current strategy of Building where you are? Look, we don't of course, we don't comment on speculation and so on. Effectively, what we are as we said to you, we basically we will this year finalize Our and we've given ourselves a target to finalize our fiber plans, which, as I said, at the full year, Well, either take the form of a fiber JV, but we did Or potential small acquisitions or potential, let's say, potential acquisitions in the space. So we are looking at Do we move our fixed assets into a separate vehicle, bring on a partner and further accelerate our fiber both? Awesome.
Thanks very much, Shamil. Thanks, Rachiba and JP as well.
Thank you. The next question is from Maurice Patrick of Barclays. Please go ahead.
Good morning or afternoon guys. Thank you for taking the question. If I could ask a bit to dive into the 43% growth in normalized M Pesa revenues. So you saw a Pretty significant step up. Shamim, in the presentation, your prepared remarks, you sort of referred to the fact that you were able to charge for the service rather than Elements have been free last year.
Could you sort of talk a little bit to things like what is the elasticity Around that, given the service rate of free, obviously, the major people use it and then you start charging for it. And presumably, some realize the benefit Using yet another sale now, accounting free, I can't be bothered. Can you walk us just through like the extent to which how this is running through and With that 40% number, we'd like a run rate going forwards. Thank you very much.
Sure. So I mean, you would have seen that, Firstly, on M Pesa, there was acceleration of the customer base from last year. So when we zero rated When we zero rated M Pesa, we saw 2 effects. One effect came from an increase in customer. So And now we basically, let's call it, almost a half year Into it, if we take the quarter and the end of the quarter of charging or resuming charging, which took in January, You can now see that the customer base being up 14.3% means that those customers are stuck.
So that's the first part. Your increased customer base has remained with you, and that's very positive. The second part is the number of transactions have increased quite dramatically. So we saw during the 3 period that traffic was up, I think it was 68%. And you'll see for the quarter, we're saying The traffic is up 62.6%.
So you've seen this massive increase in traffic, and those come with chargeable transactions. So the transition That people made to mobile money during the COVID period, they stuck with us. So that's why we call it platform economics midlife Because that zero rating actually increased the number of transactions and increased the customer base. And now that we're charging again, it's actually been usually positive for us for Colossal operations.
I mean, that's very helpful. I mean, I believe, Shmuel, that 63% number and 68% includes Faricom. Was it broadly Similar in the Vodafone International segment?
Yes. Yes, it has been because essentially you've picked up so everywhere the 13% or 14 Customer base growth is just for the international, right? So excluding Safaricom. So you've seen the customer base growth and you've seen The envelope of transaction is increasing as well.
Is there
anything else you want Also important to understand is at Bank of Africa, now the way we operate is that we lay certain foundations and then You know, year end, 18 months later, you start to see the benefits of that flowing through. I think pace of Africa is now nicely kicking in. In terms of the product set, the product rollout, the consistency of the platform, the ecosystem, making sure that we can improve it in each country, So they all can be very similar to what we have in Kenya. So the intent always is we're launching Kenya first and then we have the applicator across the market. So you'll see We've launched the super app or the beta app, which includes Mini app capabilities from Ant as well into the app.
And so we're taking the learnings from South Africa. We're implementing it there. And essentially, we're seeing this nice pickup in revenues. Now that is not catered for these numbers because, of course, it's early days. But all these things are kind of driven to Create the success, making sure we get the Polyza product rolled out to all the markets, making sure that we have consistent platforms.
And so through the year, you'll see more of these products and services in different markets coming to be.
Thank you. If I could ask a basic question. You talked about having 70 merchants signed up for the Super App. I wasn't Sure, that's like a big number or a small number. Is it sort of a critical mass or a number you expect to have when you launch?
I mean, what's an acceptable number of merchants have signed up by the time you launch?
So the Super App is very much about eventually you'll get to 100, right, of different entities coming in. But Initially, you have to have enough meat, as I call it, in the Super App to ensure the success. What's very encouraging is the big brands that have come on, that have signed up. The likes of Mesmer, which includes macro, game, builders warehouse and so on. And then also people like clicks in the whole clicks Group and Adgers in the whole Adcon or Retailabilities, it's now called that whole group.
And so like that, you've had You've got some really nice big partners that have come on, which immediately almost ensures the that you've got Enough substance in the after launch. And I think that's the big part. And then, of course, the number of parties is a lot more than the 70, But all of them will not be ready for launch. So in the days and the weeks that follow, different ones will kick in all the time. So your ecosystem just keeps on expanding and there's always something new that you bring into the super.
Got it.
Thank you so much, Inveson.
Thank you. The next question is from Jonathan Kennedy Good of JPMorgan. Please go ahead.
Good afternoon. Just two questions from me, please. I saw some comments, I think, by Nick Reed And Vodafone's results talking about potentially spinning out in peso. I just wondered if any thoughts had changed around Keeping the business within the group or potentially unlocking value there. And then secondly, I know you made some comments on the spectrum auction.
Just would like to understand whether you have access to temporary spectrum Beyond the end of August, I think is the date that was originally stated, if I'm correct. And whether or how you see the timeline for spectrum Playing out now, we've seen another kind of 3 months delay. Okay. So to be clear, Ned didn't say we're Turning off the company of that sort. What it did say is that and which we've said to you before, We basically took the initiative a while back, either on the initiative or also in some instances the regulatory But effectively, we have split out the M Pesa company into separate entities, yes?
And in the that's now, of course, in the Vodacom statement. And so we have basically created that Optionality as such. But also what we I mean, what's clear is that the financial service part It's growing at different multiples, okay. And the multiples are hugely attractive. We're seeing multiples of 26 times plus.
That said, we're not yet in the mode of wanting to spin anything off. What we're hoping for Is that all of you will give us credit for it and that it will become more prevalent In our share price that we have, the strong revenue pool and revenue growth part. So I think that's and that's why you'll see, As you would have seen at the year end results, increased disclosure around this. And but I think And I think that will be the same in telco in Africa for a while to come. Is that basically a lot more Excitement, disclosure and understanding around financial services and the potential growth And the contribution that it's making to each of our entities and how materially it's becoming in our businesses.
So yes, we're not We are keeping optionality now. But ideally, all of you will see the light and give us value. I'm done with the spectrum option. I think, we look, Where we are is twofold. 1 is the court case, and the court case I think is coming up in September.
So that's the one side. Ekater is hard at work in time. So the one side is the court case. And of course, with the court, you can always have you have a hearing and then they might You know, they could have a postponement and so on and so on. So I can't give you an end date of when that happens.
My personal view is that once the digital migration has happened, which government is indicating by the end of March, that takes away one of Telkom's primary arguments that In fact, your auctioning spectrum that's not available. So that's the one side. But Icasa is out of work in trying to reach a settlement And they've, of course, been engaging with all of us as operators in terms of proposals around the settlement. And we've been actively engaging. We're hopeful that they will be able to find a solution.
Telkom permitting, I would call it. Why call it Telkom permitting? Is that Telkom there's always the risk that Telkom will find a reason to delay it or play games. That's That's always that's always been. But it does look more positive and it does look like they're coming to the table.
I'd say that fingers crossed.
Okay. Thank you.
Tempur spectrum It's extended to end of August, but we think that if I cast those find the solution, they'll continue to extend that. Great. Thank you.
Thank you. The next question is from Mayuram Rajaratnam of Midva. Please go ahead.
Good afternoon, guys. Thanks for taking my questions. The first question is on your data subs. In the last few quarters, we See that you've been able to add prepaid subs and a bit of postpaid subs, quite a number of prepaid subs. But The data at the subscriber is actually coming down.
So perhaps you can explain, is this Sort of an internal thing or is it the market environment that you're paying in? I've got a few more questions.
I think it's more an internal thing. We have taken certain actions on the Facebook flags and we're also Putting in measures to control the free traffic on the network and so on. And so yes, we've put more stricter controls on some of on certain things, specifically Facebook Flex. And that will never that does have an impact. But of course, the customers that have come off is more Low spending to no spending customers.
And of course, is that we You've seen a strong growth in the number of smartphones as well. So the smartphone base continues to expand.
I mean, there are a few moving parts here, I mean, the ARPU seems to be coming down as well. So they're not necessarily the lowest spending customers who are going out.
The ARPU part, you must be careful on ARPU in total versus us. Remember, You have the bigger base now. So last year, you had that massive increase in ARPU, remember, because of the volumes in the big comp that we're betting Again, so I think more important to look at quarter on quarter than it is to look at year over year.
Sure. But it's just the trend line seems
Strange, there was 0.5 difference in ARPU.
If you normalize for everything that went wrong, right?
Yes. Well, not for everything that went wrong, but essentially quarter on quarter. So basically, it's more because when you take when you so we're saying on a quarter on quarter basis ARPU declined 3.5% and that is Year over year, okay. Quarter on quarter. So yes, quarter on quarter.
Adjusting for these impacts basically is 0.5%. So remember, we also decreased prices about 14%.
For sure. Okay, fair enough. My next question is the wholesale revenue grew, which is nice to see, and I think JP was coming up to say it had a 1% boost to the revenue growth, right, in South Africa. But presumably, that didn't come Full bang on the 1st April, right? So it sort of came in waves through the quarter.
So is it fair to assume that's just the average Improvements or the exit rate is probably like 2% or more?
No. I'll say most of the traffic All of the traffic is on from the 1st of April, yes. So remember, you came in already from 1st March. So you've had a full quarter of revenue.
Okay. That's helpful. The next one is a quick one on Air Term Advanced. I mean, It's a phenomenal product. There's no doubt about it, right?
I mean, you have 46% of your prepaid revenue coming through the advanced program. Is there a limit to this? I mean, because it keeps growing and actually it seems to have grown even more robustly lately than in the past because it's growing off such a big base. Just some thoughts on that, please, Shamir.
Look, I think to be honest with you, in terms of 46%, 47%, I think we exit the quarter in like 40 7% of airtime going through it. I do think there's a limit on the one side. If you think about it Yes. But more crudely, 47% of the time people are lending Airtamp from you before buying Airtamp from you, Yes, which is interesting. And I mean, on the one side, The benefit that flow for me is a couple of fold, right?
Can you mute? Sorry? So the benefit that's coming from it is a few fold. One is that it increases your active days, right? So that helps us a lot.
The second thing is that we keep reinventing the term advance. So what we do is and why the growth is still coming is What we're doing now is initially it was low balance and no balance. If you didn't have money, we borrowed your sum. So 4,000,000 times a day, someone tries to buy something, doesn't have money and we extend in advance. The interesting part is that now what we do is we do what we call partial bundle completion.
So if you've got ZAR5 in your wallet and we push you a ZAR10 bundle, right, we basically borrow you the ZAR5 increment. So that has the ability to do 2 things. 1 is pushing up spend. So a lot of the benefit also comes through Intelco of this product, right? But secondly, it increases your active days because that bundle could be for another 7 days or another 2 days or 3 days or whatever it is.
So it increases your activity as well. So that's why we're putting a lot of focus on Aetem Advance, not just in South Africa, But in all our markets to make sure that we can get the same benefits that we've had in the South African market. So I think that's an important part. Now you'll see that the other interesting thing is that the 17,000,000 customers provided provision, but only 10 point €8,000,000 using the service. So there is still growth there in terms of potential customers that would use the service.
But to be honest, I wouldn't get too carried away Because I think 47% of airtime is big. So That's the WiFi. So I do think over time it does slow down. That said, I mean, we're now starting to do The same functionality would be used for things like Advanced Me, right, which will create another growth trajectory For the Nandelsberg and of course that a lot of those things will come to more Well, we will come tonight in the Vodafly platform.
Great. It sounds like a very clever product, the advanced airtime and the changes you're making. And just the last one, the government contract, when do we start seeing some impact from it? I'm talking about the postpaid one. Thanks.
I'll leave it there.
Yes. So look, I mean, to be honest, it's we I think we'll be able to give you better color at half year and Through the year in terms of impacts, it's still early days on the Government contract, I mean, I think we're very comfortable with the competitiveness of the offerings that we've put forward. But remember, every department now, all 4.60, all of them have to decide to renew Or change. So yes, it's and of course, they'll do it with different time lines. So It's still we'll be able to give you more high standard ARPU.
Perfect. Thank you so much.
Thank you. The next question is from Nadeem Mohammed of SBG Securities. Please go ahead.
Good afternoon, Shameer, Resiv and JP. Just two questions from my side. Firstly, it seems like the turnaround in Vodacom International was quite broad based and I see Voice only up as much as 7.2 percent on normalized basis. So just wondering, is that because of an economic recovery in those markets? Or is it Due to specific interventions that you put in place in those markets.
And then secondly, we came across the Mbeza business still happening there. This is a very, very exciting opportunity for Beza. We're just wondering how In that then, are you planning to watch it in other markets, even South Africa, I think that could be some relevance here as well?
Nadim, would you mind repeating the second question around
Maybe my connection is all good. This is asking about the Ampeza Business Store app that was launched, I think, last So the same that margins, it seems to be scaling up quite well in market. And I'm just wondering how far you on the J curve in that? And Are you going to roll it out in other markets such as South Africa and some of the other Vodacom international markets as well?
Yes. So maybe firstly on your first question on the international revenue, you're right, it is broad based. Revenue is coming from different areas. I think it's coming from 2 fold. One is that there is definitely the economic recovery that's happening across all the markets.
So I think a step up across the board in every market in terms of performance that have come from both voice and data, so much stronger performance there. But we're also putting a lot of focus using the personalization engine, the CDM part, specifically On voice but also on data, and now we're making sure that the CDM activities also extend to M Pesa. There's deliberate actions like morning offers, these type of things. And across the group, what we've done, including South Africa, It's what we call an active day focus. So we break the base down into voice active, data active, 5 days voice or 10 days voice, 5 days data and so on and so on.
So 5 days, 10 days, 15 days, 20 days on the one axis. And then on the other axis, one axis is voice, one axis is data, and we put that into different quadrants. Then basically what we do is we put more targeted offers Again, those customer bases to try and increase the active days because if we can increase the active days between By 2 days, across our markets, we shoot the lights out. So I think it's that sensitive to the active day piece. So we're putting a lot more focus on trying To drive up the active days in each market because in my in some of your view, no customer puts The phone into the door at all, not even for 2 days a month.
So if anybody is less than, let's say, 30 days active or 28 days active, then effectively they're using somebody else's network. So how can we then counter that By putting compelling offers. So if we know you're only 10 days active, at day 7, we have to come up with a compelling offer to extend that usage. So those are the kind of and using the AI tools and making them work a bit harder in that respect, we think we can achieve better results. So that's a key focus Right.
I think as far as EBITDA goes, I think the opportunity is still huge, right? I mean, if you look at the contribution to service revenue, It's still below 20%. So still a huge opportunity to grow in terms of revenue going forward We should be able to grow the financial services portfolio, high teens, Early 2020, I would say for the foreseeable future. So I think that portfolio will grow continuously. That said, I mean, we basically have 2 we're also targeting it from 2 segments to your point.
The one segment is the consumer part And the incomes, the lending, the loan marketplaces, making sure the full ecosystem or products are available, the new app, The mini app capability and so on. So that's one bucket, right? The second bucket is around and the use of big data analytics And CVM is on the consumer side. On the merchant part or the enterprise part, I think the merchant app becomes a bigger play in the PASA markets. And so we're rolling that out to all the markets as well and putting more focus on it.
I think the strategy in that regard is very well defined in Kenya and in South Africa. In Kenya, where we have You know, we're also 320,000 odd merchants, probably more during the quarter. But That's been a big play for us. And the other markets have been lagging on the merchant part. So we're putting a lot more focus on that and growing the merchant products Through the merchant apps and so on.
And that merchant app that you've seen is, of course, from Empire South Africa. So then also the and then in South Africa, of course, We're very well ecosystem. We're effectively we have point of sale devices, which we're now rolling out. We're scaling up The loans that we're extending from the point of sale devices from business advances to all the way from ZAR10,000 to ZAR1,500,000. Then, of course, the Vodaf Trade platform where you can order from all the FMCG companies through the platform.
And we now introduce invoice financing, which will be new. And all of these products help to create the ecosystem that we're pushing, Which is a 2 sided ecosystem of both merchant and consumer.
Thank you so much. It sounds really exciting On the merchant side as well as the consumer side?
Yes, definitely.
Thank you very much. So we have no further questions in the queue.
Okay. If there's no further questions, thank you for joining today's call. If there are any other questions that you may have, please reach out to the Vodacom Investor Relations team.
Thank you, sir. Ladies and gentlemen, that concludes this event and you may now disconnect.