Vodacom Group is targeting a quarter of revenue to stem from digital and financial services in the medium term, as the operator reported a boost in operating profit.
Normalised operating revenue for the group stood at ZAR28.23 billion (US$1.7 billion) up from ZAR27.65 billion last year (2021).
Reuters reported, the South Africa-based company has been diversifying its business away from pure telecoms to providing financial services, ecommerce and control of home appliances through smartphones.
The company forecasts smartphone uptake will continue to rise as will connectivity penetration, which will then lead to subscriptions for financial services that millions of Africans still do not have access to.
Vodacom has invested to open new services in digital, financial services, fixed broadband, IoT and connecting household devices to the internet. These were highlighted to have yielded service revenue growth of 4.6% to ZAR79.9 billion in the financial year ending March 31.
Financial services were the highest revenue driver from so-called new services with a surge of 14.4% to ZAR7.6 billion, which was driven by the strong uptake of Vodacom's South African "super-app" VodaPay, reported Reuters.
The app has gained 2.2 million downloads and 1.6 million registered users since its launch in October. Vodapay enables bill and shop payments and accentuates the growth of mobile money platform M-Pesa.
IoT revenue was up 32.1% which was supported by products sold in agriculture and smart agriculture, new services in this segment totalled to ZAR14.3 billion contributing to 17.9% of service revenue, with a future target of 20%-30% contribution.
"Each year we see a step-up of the contribution of these new services and part of that will be underpinned by the launch of e-commerce through the super app and capabilities of VodaPay in all our markets," said Vodacom CEO Shameel Joosub.
Vodacom gained a majority holding in Vodafone Egypt from their parent company last year, a transaction which it said is now finalising.