Welcome to the Vodacom Group Limited Results Conference Call for the quarter ended 30 June 2020. Vodacom Group CEO Shamiel Yousef will host the conference call. I will read the forward looking disclaimer before handing over to Shamiel. This announcement, which shakes out the results of Vodacom Group Limited, for the quarter ended 30 June 2020, contains forward looking statements. These statements have not been reviewed or reported on by the group's auditors.
With respect to the group's financial condition, results of operations and businesses and certain of the group's plans and objectives. In particular, such forward looking statements includes statements relating to the group's future performance, future capital expenditures, acquisitions, divestiture, revenues, expenses, financial conditions, dividend policy and future prospects business and management strategies relating to the expansion and growth of the group. The effects of regulation of the group's businesses by the government in the countries in which it operates. The group's expectations as to the launch and roll out dates for products, services, or technologies. Expectations regarding the operating environment and market conditions, growth in customers and usage and the rate of dividend growth by the group.
If you do not have a copy of the results announcement, it is available on the Investor Relations website on www.vodacom.com. Please go ahead, sir.
Thank you. Good afternoon, everyone, and good morning to those joining the call in the US. Joined by Cytom Underlosa, our Interim CFO and Sean Van Beleon, our Head of Investor Relations. In quarterly results, we will only focus on revenue and key performance in cases today. As with prior quarterly results, Safaricom does not report this performance, so we will therefore not be disclosing an update on their results during this call.
Our results for this quarter were impacted by the COVID-nineteen pandemic, both positively and negatively. The South African business was resilient and delivered strong growth in service revenue despite the price reductions introduced on 1st April. Our international operations were ever impacted by the low economic activity, free or discounted peer to peer transfers on M Pesa and customer registration requirements in Tanzania. Having a diversified portfolio resulted in the group benefiting from currency changes, pushing revenue up by 5.6% and service revenue up by 7.6%. Normalized growth 1.3% for revenue and 2.6% for service revenue.
Let's take a look at the South African segment. Service revenue increased 6.4%, driven by strong customer revenue growth of 4.3%. This was supported by the good uptick in data demand with this increased usage offsetting the impact from a price reduction on our 30 day bundles from 1st April. The demand for data increase in the quarter as people worked and detained and studied from home during the various phases of the lockdown period. Data traffic doubled in the quarter and usage per smart device grew 75% year on year and 22% from the March 2020 quarter to 2.2 gigabytes per user.
There are now 13,200,000 4g devices connected onto our network and increase of almost 30% year on year. The overall trends in the contract customer segment improved with revenue growing at 3.4%, and customers up 2.9 percent to 6,100,000 customers. We offered a number of data products to support businesses to work from home and assist schools and universities to continue education initiatives. Performance in the Prepaid segment also improved with the customer with customer revenue growth of 5%, significant growth in ARPU of 20.8% was aided by the lower customer base in the quarter, due to store closures and movement restrictions, which led to decreasing in, gross connections during the period while you would still have had the churn from prior periods, take taking effect. The highest spend is partly due to telco spend fitting from a larger share of wallet during the lockdown period and our deliberate approach to increase active days and pick up opportunities specifically around working and educating for mobile.
Our growth in data bundle sales were driven by both lower data prices during the quarter and lockdown related increase in demand. Following our price changes since the beginning of the year, we note that most customers continue to spend at a similar better levels than previously benefiting from higher allocation of data at these price points. On enterprise and wholesale segment, we, which now accounts for 27.02 of service revenue, this grew by 13.1 percent. This was driven by an increase in the take up of MBB contracts and APN access as well as national roaming revenue. Please be reminded that from next quarter, the transition between roaming partners will be in the base so growth will be moderate moderated during the year.
We were able to increase our homes and businesses connected to just over 79,000, up 121%. Financial Services recorded $540,000,000 in revenue in the quarter, grained by 10.9%. The airtime value via the app almost doubled from the last quarter as customers are using this more convenient means to recharge and make build payments. We advanced 2,800,000,000 rand in airtime via the airtime advanced platform to 9,300,000 customers 38% of all recharges happened through a term advance. Insurance growth continues with revenue increasing 8.2%.
We also entered an exciting new partnership with Alipay to further the financial services strategy, which I will talk about towards the end of the call. Our international operations were impacted by the subdued economic activities as a result of slow trading activities during the pandemic. We also discounted peer to peer services on E Pesa to enable social distancing as a method of contactless payment, which had an impact on E Pesa revenue growth. In Tanzania, the buying of services to customers due to the biometric, customer registration requirements in Q4 last year impacted its service revenue growth as a expected. Data continues to perform well supported by network investment and the expansion of 4G.
This culminated in service revenue growth of 10.7 percent for the portfolio, emphasizing the managed benefits from these operations, despite a decline of 5.3 percent on a constant currency basis. Our international operations contributed 30.2 percent to group service revenue. Data customers increased 5.2 percent to 20,000,000 representing 53% of our customers with data services. Data traffic was almost up 44.3% in the international segment, driven by the need to work from home. Mobile Financial Services revenue from M Pesa reduced in the quarter due to low economic activity and movement restrictions in several of our markets.
Active and PASER customers increased by 3.5percentto14.7000000. At baseline revenue grew 17%, and declined 3.1% on a normalized basis, representing 18.7% of service revenue. We expect this to recover as these services are reduced during the next couple of months and economy start recovering. We processed $3,500,000,000 in value of invasive transactions per month during this quarter. As a reminder, that these in Pesa numbers exclude Safaricom.
So this is this illustrates the scale of what we have we have on M Pesa outside of Kenya. We invested $803,000,000 in capital expenditure in the quarter as we expanded our 4G rollout. We now have just over 2940 sites across our operations. Before I conclude for questions, I'll just give a quick update on some of the regulatory matters. One of the most pertinent issues in Tanzania has been biometric customer was last quarter, we reconnected 745,000.
Since April, the Tanzanian regulatory authorities suspended further services by adding due to the COVID-nineteen pandemic. Currently, we have 1,900,000 SIM cards generating more than 4,000,000,000 Danzanian shillings almost $30,000,000 rand per month that remain non biometrically registered. We await further instructions on the TCRA with regards to the mining of services to the remaining nonbiometric registered SIM cards. There were further regulations and SIM card ownership on the 1st July 2020. The TCRA issued a public release that required customers who biometically registered more than 1 SIM card service provider to verify the SIM ownership by 31st July 2020, through their mobile phones.
The customer may request an approval for additional SIM cards to service providers retail out and we've just gone live with an automated USB solution where customers can initiate the approval from their phones. This is a better process than the medical process and additional envisaged. And a better outcome than what is originally anticipated. In South Africa to support the increase in network demand, Icasta allocated temporary access to Spector, which is available until, the end of, November, or, can be extended until just before the, option takes place. We have used the temporary spectrum to alleviate capacity issues where possible at the 3.5 giga to allocate the spectrum, to fast track our 5 gs launch and support the initial Dialog This is assisting us in getting real world learnings of this new technology before permanent spectrum education later in the year.
Ykasa is also making progress in allocating high demand spectrum. By all accounts and public statements made by them, they are still aiming to complete this process by the end of the year, while the WAN licensing will only happen in the following year. We expect the ITA in the next few weeks, which will provide more clarity on the spectrum lots and pricing. And finally, I'm happy to announce our partnership with Alipay to launch a super app in South Africa which will allow customers to pay via the app, make peer to peer money transfers, borrow via the app, invest do online shopping, stream music, watch movies, play games, book travel, book travel and movies, Hell taxis and Ubers without leaving there, all enhanced with in app advertising, promotions, gifting, and more. This is the first time Alipay with 1,000,000,000 users worldwide.
As partners with a company, they don't have equity in. Overall, this will help us to accelerate our financial services strategy in South Africa. This concludes comments in CT and I are now ready for any questions.
You. You. Our first question is from Prashantran Odeo of Nitiksi Abi.
Hi. Good morning. Sorry. Afternoon from you and team. Just three quick questions from me.
Non service revenue, can you us a bit of color of what's what's in there and what's driving, sorry, not non service revenue. Sorry, what's other other non service revenue? What was driving that 76% increase and what is in those numbers? The other two questions I have, one is Can you give us some color on what happened to voice usage in the quarter considering this was the 1st quarter? Reported in South Africa lockdowns.
So what has happened there? And then the last question is can you tell us how much enterprises contributing to South Africa's service revenue in these quarterly numbers? Thanks.
Hi, thanks. Thanks for the question. So non service revenue is, is really driven by 2 two two elements. So the first is we had a 22.5% decline in our equipment revenue. Which was as a result of lower sales during the lockdown period on our our handsets that did pick up towards the end of the quarter.
So we're happy with our exit rates. The second element of that, which, partly offset if you're looking at that from a quarter on quarter basis, there's an increase in our site, rental, which is coming through from hire sites on, that rain have with us. We've moved up from about 3100 sites in prior quarter to to 5000, 5300 sites. On a voice, what we saw is firstly, as we went into lockdown, in April, we saw voice, dipped slightly. However, post that what we've seen for the quarter as a whole is that voice did pick up.
And on a year on year basis for Q1, our voice our voice revenue was up 5%.
I think the important point is that we, in the month of May June, we saw, we saw our highest voice revenue, that we had for, for, for period of, over 17 months. And so for some reason, people decided to talk a lot in, May June, and that seems to in April, they weren't talking as much, but then they, suddenly started talking a lot more, in, in May, June. In terms of enterprise, the enterprise and wholesale segment constitutes 27.2 percent of service revenue in the quarter, and that grew by 13.1%. Remember in those numbers is also the impact of, of the roaming revenue. Which, which, which came in from July last year or the uptick, of having Telkom fully on board.
Came in for July last year. So the numbers in the quarter, both for enterprise and overall is boosted by by that. So the growth rates will taper down, slightly by about 1.3%, as we go into into the following quarter because of the lapping of roaming revenue.
Thanks very much, gentlemen.
Our next question is from Jonathan Kennygood of Standard Bank.
Good afternoon. Just to follow-up on your on this non service revenue growth, which I think was 76%. And you mentioned rain and the increased site rollout. Should we expect a similar kind of increase in the cost of roaming, going forward as you experienced in the revenue line. That's question 1.
And then Just wanna get a sense from you on the CapEx side with the data traffic growth, you know, what's what's capacity looking like and and does it affect your absolute rand, CapEx envelope for the year. And then and then just one other thing with the prepaid subscribe the numbers declining. The daily active users are stable or slightly up. That's should we expect lower subscriber acquisition costs as a result of declining gross connections? And is this kind of a change and in in how connections are churned in the market, or or is it just a lockdown impact?
Thanks. I'll take those. I think with, Ren, what you will see while we have the other revenue and the other income will equally have a costs coming through a cost line flowing through on direct cost, which largely from an EBITDA perspective will be neutral. However, it does provide, a slight drag on margin, potentially something around 0.3 percentage points on a full year basis in terms of the incremental, run, sites that we've taken on. With regards, the prepaid, what we did see was, ultimately, as as Shamil said, towards the start of the lockdown period, due to some of the mobility issues, store closures, etcetera.
You did have low gross additions. And as a result, that does give us some of the acquisition cost saving. However, what we have seen is all of that starting to come back sort of May into June and and July looks fairly strong as well. So the exit run rates are back to sort of normalized levels of what we'd expect on our gross connections.
On prepaid, our contract is still slightly lower, but we're also seeing lower churn, than what we would normally experience, across. Across the base. Also important to note, and, when you look at the customer base and whites down is because remember, you've got this high growth effect and what I call the washing machine part. What what COVID has done is help to solve some of those issues although you have the churn coming through from previous quarters, the lower growth, will also result in lower churn. In the in the later quarters.
So you had less, shall we say fictitious, terms. And therefore, you've also seen a a nice jump, in the, so firstly, sorry, firstly, important to note that the 30 day active customer base has continued to increase. That's one, as you would have seen in our announcements, And so that's the one part, but also, you know, it's given a nice to a jump in ARPU of 20%.
Yes. So as you say, these gross connections coming down, I mean, should we, could there be lower subscriber acquisition cost going forward? Or was that not a permanent feature of the market now?
No. So what's happening is you'll have a bit of lower gross connections in contract. But what we're also doing is make sure that we're increasing our, our in contract customer base which, which then also has an impact on, on on churn reduction. And, and, so what we're saving on the one side we're investing into, into retention, to make sure that in the end, we have positive customer base growth.
Got it. Thanks. And then just a follow-up on the data traffic impact on CapEx.
So your CapEx, your CapEx for the year will probably be at a lower rate than the normal CapEx that we invest in South Africa. Specifically. We we've toned down the CapEx a little bit this year, given some of the pressures on or rather some of the issues that we were anticipating, with, with COVID that so far as it materialized. Right.
And so network capacity is fine despite the traffic growth.
Yeah. So capacity wise, I mean, we we we basically front ended some CapEx investment to make sure that we could cope with the capacity. And we're using a combination of, of course, additional CapEx investment or, let's say, our normal CapEx investment for capacity. We're also using, the rain, spectrum, or the rain roaming. If we can put it that way, and we're using the temporary spectrum, all to cope with the additional traffic.
Just to add to that on the CapEx, equally in this quarter, just a reminder, we have invested ensure that the availability of our network remains, remains high. So a lot of the battery rollout program to ensure that we can cope with any further ESCOM node shedding period.
Our next question is from Slava Dekhyarev of Goldman Sachs.
Thank you very much for the call. Couple of questions. Firstly, how do you see competitive environment during Q1? Has that become more rational and is there any increased competition as lockdown measures are listed? And secondly, on your opportunities, with regards to the Alipay agreement, what are the couple of most exciting pillars within that agreement in your view?
And would you expect any impact to be visible already in the near to medium term? Thank you.
Okay. So I think on the, so in terms of competition, I think a lot more rational, I mean, firstly, us and MTN having both reduced prices, you know, I think we we both have to have to deal with that issue. COVID gave us the inbuilt I call it in both elasticities. Okay. So normally, remember what would happen is you would go negative and then you recover it over a period of 4 to 5 months.
You're trying to get that usage back. Covered is that the effect of, despite the price drops giving us enough traffic increase to offset to offset those, to offset those impacts. Yes. So that was, that was quite positive and quite strong. And, yeah, so in terms of, but generally, the market seems to be a lot more rational.
In terms of, during during this period, telecom has actually put some prices up. And Celsius, you know, I think it's issues. So no, no more aggression or no more say, I could have some offers or anything coming from that from that part. Also remember us and and and NTN have moved the level down in terms of pricing. So any pricing gaps that would have existed has been narrowed between us and the, and the smaller, smaller competitors.
So that's one. And I think that's probably played in our favor well, during the quarter being more competitive during a crisis, I think, is to turn out to be a very good thing. In terms of the Alipay agreement, I think, usually exciting, for us, in terms of that, we now have access to the best tech in the world. And this super app will have the ability to, to, to aggregate a lot of the different services you know, from the app, you'll pay, you'll lend, you'll save, you'll invest, you'll get entertained. So it the way to think about it is multiple different merchants exposing their their services, through the app.
It will be 0 rated within the app. And you'll be able to, to access all kinds of things. The beauty of the service is that you never leave the app. So we haven't done a deal with Uber yet, but just using Uber as an example, you'd be able to book a Uber from, from the app itself without leaving that, you'll also be able to, do, if you don't have money, we could advise you that we'll get out. So so these are the type of services.
Payments and lending will be into everything. But it's a full ecosystem and lifestyle app. Very interesting, if you haven't had exposure to to to Alipay or WeChat Pay, interesting to download one of those or or Paytm which is, an Alipay partner to actually see how, the app works. So you'll shop you'll also shop from the app. So your online shopping, everything from clothing to groceries to, to to merchandise will all be done, from, from from the app itself.
So a very, very rich ecosystem or boosted by, very good data analytics, pop up promotions, gifting. So it's got a it's we we did we did some serious homework in terms of identifying what the best tech is, and they decided to implement the full platform in South Africa. And we look we're looking at implementing elements of the platform on top of our web based platform as well.
Okay. Thank you very much.
Our next question is from Pico Mendra Chaudi of Peronitian Bank.
Great, update. My question is, I guess, probably a little bit harder to to even know what the answer is, but let me just try. I mean, you've you've had this benefit now over the past quarter of COVID with people working from home and traffic, almost exploding in your network. Now, I mean, there's this other leg that you talk about, which is the economic leg where, you know, people don't have jobs and don't have income. And we don't know what when that is is gonna come through, but you've had, call it, a few weeks of, you know, the economy sort of, like, opening up and and and all of that.
So my question is that you seem like, you know, slow down or sort of almost like a kiss in terms of traffic or in terms of ARPUs, which gives you an idea of what's gonna happen over the next few months. Given the fact that the wallets, or the competing the competing services for the for for the consumer's wallet will also increase over, you know, as as we've opened up. So just maybe a bit of color of how you are thinking about it in terms of the economic, challenges.
I think with caution, and what I'm going to say now, I will caveat with, what's caution in inverted commas. So what we've seen so far in July, is not a slowdown. Okay, the trends seem to continue. That said, remember that, you have to, you have to back out the, above at least 1.3% of roaming, benefit, in, in the quarter. That's one.
But I think the important thing is so far so good, trends are continuing. There will be and I think it's also important to just note a few things. I think, consumer wallet spend what's changed is when people were spending the money on, on, on, travel and driving to work and these type of things, the new modus, opportunity of staying connected is data. So you have to connect somehow and, you know, to connect to the world and be able to continue to So that's the positive part, I think, and from that perspective, I think it's been strong. What we also done, I think proactively from the start is look at the opportunities around the pandemic.
And one is, what I call a hyper personalization. So segmenting the base a lot more understanding if a person is 10 days active, 15 days active, and we're busy implementing this across all the markets. And they're more targeted National segmentation and offers, to those customers. Also products like Anthem Advanced is now 38% of our revenue also help where people were using, advances to, to, to access, to access airtime. So you know, it's, it's been, it's been very positive in that respect.
And we're trying to make sure that we find new initiatives to continue some of the momentum. I can't be quite heavily because you don't really know what's going to happen on the positive front. Alcohol being banned is positive. Some of the social grants benefits that have been given to people is positive. The interest rate continuous cuts, including the ones today is positive.
On the negative side, job losses, you know, I would say it's probably the biggest the biggest impact, or, and what would that impact really be? So I think you know, we are claiming a bigger share of wallet, at this, at this stage. And hopefully that continues Yeah. So we'll have to, we, you know, we're kind of making sure we can pick up all the opportunities around it. But, yeah, it's a little bit uncertain still, to be honest.
Okay.
Just just to follow-up on on that, maybe if you can, maybe comment just roughly what what the, what the, you know, sort of the batches or the the contract booked in terms of cancellations and non payments, that sort of thing. And then lastly, what do you think is you you fail to you know, gonna come through in terms of roaming. I mean, the way rumors of that that you you might get. There's maybe an update on that. Thanks.
Thanks, Greg. Maybe let me take the first one on bad debt. So I think what what we're seeing is obviously quite a lot of pressure on, particularly in the enterprise segment on small to medium enterprises. So, obviously, they've suffered quite a bit under the the the lockdown regime. So a few of those who haven't been able to trade in various sectors, obviously, under massive pressure, We're seeing that pressure come through in terms of, in terms of ability to pay.
We're obviously working with all our customers in trying to to set appropriate payment plans where possible, and see how we can be creative around ensuring that they're able to continue to receive, the services that they require to get back on their feet while making it sustainable for them to pay in the long term. On our, consumer customers. We have noted a slight, a slight increase in pressure on, on settling accounts. It's not, incredibly higher than our expectations at this stage, but we expect it will play a little bit of a feature as we go into, quarter 2 and as we close H1.
It? It was celsius roaming agreement, whether you're gonna get more out of shift. I remember there was talk that you might, just maybe an update of where that is.
Yeah. I think I'm on that for the telepiece. That's still quite open at this point. So once we've got the update that we can go to the market on there, we'll we'll let you know.
Okay. All right. Thanks guys.
Our next question is from Julia Ybrahimova of Citi.
Hi, thanks for the opportunity. I had a question on Alipay, partnership that you've announced. Is it, maybe just structurally, have you done it, between South African entity and Alipay, or is it something that you're doing via, Investa Global? And, how are you thinking, it's interesting that you're having the answer as a tool for P2P and everything, you're going for a very techie, franchise. Is there do you see an opportunity for M Pesa maybe to learn and adopt some of the tech side from the the partnership you're announcing maybe to kind of, it couldn't become a whether you see this effort as an opportunity for Inpezo to step up on the technological side as well.
In the color.
Okay. So yep. Perfect. I think I think 2 two fold. One is remember now, M Pesa is now jointly owned or, by Safaricom and Vodacom.
We bought that from Vodafone and effectively that's, or that's where we develop the central product roadmap, optimize CapEx and so on. Yeah. What so so that's the first part. The second part is the deal that is being done is a South African deal. And not, and not for M Pesa, but there will be elements that will be used in M Pesa and then explain the difference why.
So, but let me first explain what we've done. So so in, in South Africa, of course, what the the way we've we've we've start of the deal is by, as you say, putting in the best deck. But this opens up a lifestyle platform and a super app capability, which, which is not what a Pesa does today. The difference between the two, this is an open service. I call it like an iOS or a Google store with multiple different players selling their products through the platform.
And you're always taking your your cut, if we can put it that way. Yeah? And it's a very rich experience, highly data analytics and so on. So part of the logic is that we try the services in South Africa first and we go for the full because we didn't have and then pay some platform in South Africa. It's just much easier to do the transition to say that's implement a full platform, also smartphone penetration in South Africa is, is a lot is a lot higher.
And what we've been doing over the period of the last 2 years is also by building some of the underlying capabilities, that, that will form and help complement the, the end platform. So example is we've launched Vodeland, another example is, is that we have our own Android point of sale devices in the market from which you can, you can land from the device, you can ban from the device and so on. And most importantly, you can do QR payments, from the device. We have our own payment gateway, that we've established So these things, you know, help to create, to create, a lot of the, a lot of the success. And of course, we're now building all the lending products and options and so on, from from there.
So that gives us the ability to leverage this platform given the smartphone penetration in the country a lot, a lot higher. So that's the 1. The second part is on that base. So what we've done is firstly, we want to upgrade, the current platform from what we call G2, to G3. Which is it's a Huawei platform that will be upgraded.
And then effectively on top of that, we will then implement what we call the mini apps capability from the end platform or from the Alipay platform. And that will give us a similar type of experience to what we have in South Africa of but also, it will also give us clear learnings. If the platform works, let's say we can then share best practice doing the 2. And I think that that's going to leave us into a very good place, but also I think the way to think about it is what we do in South Africa is where the evolution of M Pesa will go to. Which is the whole lifestyle, lifestyle capabilities.
Okay. So just to confirm, so for the vision for Impella, it's still to have it as a as a product, across the septagon or East Africa footprint, while in such a hiring footprint, and it will and evolve it into, more open and lifestyle product. In future.
Correct. So, so Pacer will evolve to what we're launching in South Africa, right? So, I mean, we're evolving in Pacer, of course, the lending part all of those, you know, things like Songhai and, Pfizer. We're now launching in all the markets. Overdraft facilities, you know, expanding our merchant capability in all the markets and so on.
But we're using the lifestyle full a platform capability that we're launching in South Africa, almost as a learning, to, you know, what we're going to do in M Pesa. In the rest of the markets, but we see it going the same way. Open, you know, thousands of vendors selling through the platform, as opposed to what we do now, which is we have a few vendors for each service.
That's right here. Thanks very much.
The next question is from Sunil Rajkopal of HSBC.
Hi. I just have, maybe two questions. 1 is a clarification on the voice revenue trends in South Africa. If I heard it right, was it 5% year on year growth in terms of the voice revenues? And, regarding that, What are you seeing in terms of the voice trends starting from July?
And how do you think things will pay off for the year. And, secondly, on Alipay, is there something more that you can add in terms of economics or how how you would monetize it monetize the partnership And, also, I mean, how should we be thinking about, I mean, the logistics side of the probably when you start when you put in all these super we can be super app when you put in all the applications of ecommerce or ecommerce, is, would account also talk, I mean, thinking about, let's say going into logistics business?
So let me start with that one. No, we're not going into logistics and so on. It's, it's a it's a marketplace, actually. So what it what it does is So I mean, firstly, like all your online, platforms, we'll be able to sell that product to the platform. You'll be able to see look at a product, look at the advertising of our product, see a video on the product, and then decide to to purchase the product, but also land against the product.
Okay? So you'll be able to pay it off in installments and that type of thing. So that's the one. The actual delivery and so on still happens through that channel. And I think, through through, through the particular retailer and so on.
So example would be if you had a grocer like, say Pick n Pay or Ollie's, on on the platform, they're ordering and everything will go through the platform. So it's essentially creating a mini app, which allows them to expose all their products within within our platform and create, experience where you don't need the platform. The actual deliveries and so on will still be done by the respective partner. And this is this is and these are proven use cases that have been adopted across across Asia, through the Alipay. Remember, they've got multiple countries in which they've, launch Alipay into, with different partners from India to Pakistan, to Bangladesh to Korea to Thailand and so on and so on.
Sunil, we don't disclose the separate revenue lines anymore in terms of revenue and data come through in over 5 range 15. But CECO will just give you some color on the the voice revenue, but this, the voice traffic change was discussing earlier.
Yeah. Sorry. So now that that 5% is actually voice traffic has gone up 5% for the quarter. So that That's really obviously from, sort of got stronger in May June, and, and quite weak in April, but we came back and rebounded in May June. That's on voice traffic to 5%.
Sure. And, I mean, what have you seen, starting in July in in terms of the how voice traffic is shaping up? Any color on that would be useful. Thank you.
Yes, it's still early, Ben. I think what we're seeing seeing the trend holding, on, on voice traffic. And I think both on voice and data, you know, we seem to have reached a bit of a flat. So in terms of the initial growth that we took on pre COVID going into sorry, pre lockdown going into lockdown. So the trends are holding.
Still had a sort of a call it kind of 20% above your pre lockdown volumes.
Sure. Thank you.
Next question is from Shamila Vandoval of Allysys. Shamila, your line is live.
Hi. This is Pamela from. This is Pamela from. And, I have two questions for us. My first question is regarding, if, the services of Alipay will be rolled out to all the market of mobile, or I will be rolled out initially in South Africa only.
And, my second question is, if it is going to cannibalize the existing user base of MTech and the the revenues of the entire time, if there is a figure that you can write to the capitalization of these, these are used to all the levities. That's it.
Sorry, if I understood, it wasn't the line wasn't the API, if I understood the question, it was Ali Paving and rolled out to all the market. 1. And, at 10, until you were worried about the the avenue cannibalization on the services. Is that right?
Can you guys give me a call to the end of the services of Vodacom via the prepaid service?
Okay. Okay. So just to be clear, the Adelaide services are not being rolled out in the other markets. And just to be also clear, there's no revenue shares on this. It's a pure, vendor, agreement where it basically software, and and effectively, with a normal purchase of software maintenance agreements around it.
So there's no revenue shares whatsoever. In South Africa or the international markets. The full full platform will be low will be rolled out in South Africa. Elements of all of it, or specific, services, which is, of course, much cheaper and so on. But again, on the software per purpose, what we rolled out for in Pesa.
So there's no cannibalization of revenue. And there's no revenue share with anybody whatsoever.
Our next question is from the Joseph of Bank.
Santiago. Are you there?
Doctor. Line is live. It seems there's no response on that line. Our next question is from Myron Rogeratinam of Medtwa.
Hi, guys. Thanks for the opportunity to ask questions. I only have one question. Just trying to understand this interesting opportunity with the lifestyle platform and Alipay.
Can you just elaborate a little
bit more? Because you might have mentioned it in the in answering the earlier questions, but the question is when that cleared me. So is it still branded for the pay? But what happens to Vodafay in in the meantime? Because it sounds like you're buying the software only from Alipay.
So it's still a Vodafone subscriber app if that makes sense. And is it exclusive to Vodacom? I mean, so, you know, you want to take a cut from anyone who use the app? I presume, or are you only providing this as a exclusive app for Wodaka? And just a little bit more about the app, if you don't mind.
Thank you.
Okay. So, the, firstly, I mean, it's a it's a software arrangement toward them and, effectively, you're right saying, that we're just getting the technology from them, what the brand will still be about to pay, but it will be a new Vodafone, but obviously, what we have today is more a payment set. Or 75 payments that what we're moving towards is a lifestyle app, okay, where everything comes together in one in in in one in one in one platform. And and I think what we're launching more than more than the app is a platform. Okay?
And, and therefore, you know, I the the richness of it will be there, the way you make money from it, is, is basically that could be 3 revenue streams. We're still busy finalizing that, but obviously payments if you're going through it, we'd want the that you use our payment gateway and so on. That's the first part secondly, the lending opportunities that that will provide. And thirdly, 30 would be, you know, an agreement between the vendor that when they sell or the merchant, when they sell their products through us, we we get a we get a small cut. In return, they obviously, they get the richness of the data analytics, daily offers, promotions, gifting, very sophisticated data analytics that will tell the customers what to buy and when and so on and so on.
And I mean, if you it's it's quite a, for us, we see it as a game changer. And if you see, have you been to China and, you try and use a card or you try to use cash, you then quickly get to understand what the power of these apps are because people just don't accept cards and they don't accept cash. So it's a very it's a very, you know, I would say it's transformational and, and very big in terms of the lifestyle down services that will go through the, through the, through the platform itself. So so a big change from from from from the current one, to to to where we're going. The current one, to be honest, is more We've been working on this for the last 2 years.
It's the first time that they've done it, you know, with a partner where they don't have equity in every other instance, they have, they have equity in the, in, in, in, in, in those businesses. And, yeah, so we've been working with it. The current the current app was more learning experience for the ultimate solution which is what we are now going to launch. Which is also to manage expectations. The launch will probably be in, in, in Q4.
Yeah. So we, we have only announced the Now all the hard work starts and we basically making sure that, we build everything. I mean, we have a team of a hundred people, mainly software engineers that are working on this solution.
So it sounds like it's an exclusive product for water concentrators. I mean,
sorry, to be clear, it's exclusive the relationship with Ant is exclusive to us in South Africa. Okay. So it's completely it's exclusive from that perspective. That's one. And 2 is the service itself will be available to Vodacom customers and non Vodacom customers.
Right. But of course, if you are a Vodacom customer, you'll get free, you'll get the app 0 rated. If you're an NTN customer, it will be sorry for you.
And so just following up on that, right? How does the user get money into the them. Is it similar to how it works in China, India, or is it slightly different? I mean, we have a quite an entrenched banking system South Africa and salaries go into the banking system. So just your thoughts on that and I'll leave it there.
Thank you so much for answering.
So you have a link card initially. So you can link a card. You'll have a virtual card that you can apply for, as well. You'll be able to directly link it into your bank account. And, and, shortly after launch, you'll have what we call the store value.
So like very similar to M Pesa, which is a store value, you will have that as well. If you can top up your store value, for my moving money seamlessly from your bank count into it, or even going to an outlet and and and converting it, your cash into into money in in the ValuePay wallet.
From Citibank.
Hi, Shamil and team. Thanks for the quest two questions from me, please. The first one is on telecom roaming traffic volume in q 1. What are the trends there and how should we think of this going forward? And then just a quick follow-up or clear up maybe on the Alipay Vodacom Super app.
Can I just confirm that the app will allow optionality for the use of credit and debit card as well as other payment platforms, or is it gonna be a exclusive payment channel that needs to be used here? Thanks so much.
So it will be basically you can have it's multiple parts. You'll have a store value, okay, which is where where you basically move money into into the wallet itself. That's one option. You can do a link card with the credit card or debit card. You can link an EFT.
There'll be multiple sources of how you can basically, contract. So so you could have a pass through directly into your card and so on. How or you could basically move money seamlessly, from from your bank account or your card into into the ValuePay wallet. So we'll complete our customer will have complete flexibility.
Okay, perfect.
On on telecom roaming, so we had a a quarter on quarter step up from Q point to, Q1. And, and really what we'd expect is, to to sort of maintain those levels. So we saw in essence, a little bit of the step up in telecom traffic to what we have seen on our own through the COVID period. So they they work potentially be some plateauing of that, but essentially would expect to maintain those run rates.
Okay. Thank you very much.
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Thank you. Thanks everyone. Thanks for joining us.