Vodacom Group Limited (VOD) Earnings Call Transcript & Summary

Good day, ladies and gentlemen, and welcome to the Vodacom Group Limited Results Conference Call for the year-ended 31 March 2020. Vodacom Group's CEO, Shameel Joosub, will host the conference call. I will read the forward-looking disclaimer before I hand over to Shameel. This announcement, which sets out the results for Vodacom Group Limited for the year ended 31 March 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 include statements relating to the group's future performance, future capital expenditures, acquisitions, divestitures, revenues, expenses, financial conditions, dividend policy and future prospects, business and management strategies relating to the expansion and growth of the group with effects of regulation of the group's businesses by governments in the countries in which it operates, the group's expectations as to the launch and rollout dates of products, services or technologies, expectations regarding the operating environment and market conditions, growth in customer usage and the rate of dividend growth by the group. If you do not have a copy of the results announcement or results presentation, it is available in the Investor Relations website at www.vodacom.com. [Operator Instructions] Please also note that this call is being recorded. I would now like to hand the conference over to Mr. Shameel Joosub. Please go ahead, sir.

Thank you. Good afternoon, everyone, and good morning to those joining the call in the -- joining us on the call from the U.S. I'm joined by Till Streichert, our CFO; and Shaun Van Biljon, our Head of Investor Relations. The emergence of the coronavirus pandemic has herald a time of unprecedented uncertainty. And now more than ever before our communities rely on us to keep them digitally connected while they are forced to be physically apart. We are proud to offer world-class network technology in all the countries we operate in to keep our customers connected. We have already seen the numbers and we have taken you through most of it at the results presentation. For this call, I will take you through some of the key takeouts for the period. I'm pleased with our results for the year, and particularly, the stronger momentum gained in the second half, with South Africa specifically turning from negative top line growth to finish strong with positive growth in the second half. Our investment in Safaricom continues to perform well. Safaricom contributed ZAR 3,6 billion in after-tax profits. They continue to deliver solid results, growing the net profit by 19.5% for the year. We're also very excited with opportunity to work even more closely with Safaricom in driving financial inclusion across our operations now that we've acquired the M-Pesa brand and development assets in a joint venture with them. Our financial services portfolio delivered strong growth across all our markets as we expanded our service offerings, integrating more payment options, enabling merchant payments, insurance and bringing loans and savings opportunities to over 53 million financial service customers. Our M-Pesa business continues to deliver solid growth. And as a group, we now process ZAR 2,6 trillion annually through the M-Pesa platform. We strengthened our partnership with AWS who have now also -- who have also launched regional operations with the launch of the Africa Regional Cloud in Cape Town, deepening our expertise and capabilities with 51 employees certified in AWS Cloud Services. Looking at the numbers. During today's call, I will be quoting a few additional numbers. The reason for this is that we have adopted new accounting standards for leases, which impacted growth and the cost from our BEE deal in the prior year, which also impacted the underlying performance. When I talk about normalized growth, this is growth, which excludes those impacts as well as the currency translation differences. So this gives you the best view of how the business is performing on a like-for-like basis. From a group perspective, we have reported solid service revenue growth of 5%, with revenue up 4.8%. We added 5,9 million customers in the group, including Safaricom, to reach 116 million. We added 6.1 million data customers across the group to reach 61.5 million, with just over half of our customers using data with still more opportunity for growth. EBITDA increased 11.6%, boosted by the accounting changes on a normalized basis. This was up 2.3%, supported by strong growth in the International operations as well as the South African second half performance. International portfolio has provided good hedge against the weaker rand during the period. Headline earnings per share was up 8.9% and we have spent ZAR 13,2 billion on expanding and improving all our networks. And more importantly, the Board declared a dividend of ZAR 4.05 per share, in line with policy, bringing the total dividend to ZAR 8.45, up 6.3% on last year. Let's look at the segments in more detail. In South Africa, service revenue grew by 2.3% or 3.3% after adjusting for the deferral release to revenue in the prior year of ZAR 389 million and the current year change in mobile termination rates. We saw South Africa returning to strong growth in the second half of the year. This was from the anticipated increase in data usage, which offset the impact from the reduction in out-of-bundle rates by 50% from the beginning of the year. This is a good result in a low economic growth environment. Service revenue growth was further supported by revenue from the Telkom roaming agreement, which came into full effect this year. In the contract segment, we gained 247,000 customers with both the enterprise and consumer segments delivering strong growth. Overall contract customers were up 4.2% year-over-year. In the prepaid segment, net additions were negative by 2.1 million due to the ongoing efforts to optimize new additions to improve the quality and the cost of the base. We continue to gain traction from our pricing transformation efforts. We have made a number of changes over the past 2 years, especially on data pricing, and we'll be continuing on this journey in the year ahead. We have made some further price adjustments, particularly on the 30-day [ out-of-data ] bundles and we expect that the current work and entertain from home scenario will help to drive the required elasticity even further. These commitments have been made as part of the Competition Commission settlement. The underlying data metrics are strong. We added 1,9 million data customers this year, closing up 9,7% for the year. Data traffic increased 66% in the year with even stronger data traffic growth in the fourth quarter and usage for smart device grew 56% to 1.5 gigs with 12,9 million 4G devices connected on our network. We sold just under 1 billion data bundles this year, up 15%. I'm encouraged by this behavior as it means that we are making data more affordable, but also that customers are truly growing into higher data usage. As mentioned, customers using our digital platforms are growing strongly. This remains a key strategy to drive data usage and the next step is to roll this out across all our markets. Financial services continues to perform well with the revenue increasing 21.5%, making it a ZAR 2 billion business now. 9,9 million of our customers have accessed ZAR 9,9 billion of airtime through our Airtime Advance platform, which in the times of the lockdown has proven to be very effective. Our insurance revenue increased 16.1%, with policies up 45% to 1,9 million, with a growing portfolio of products on offer now. EBITDA grew 4,9% or flat on a normalized basis. I'll unpack this for you in a bit. There are a few once-off items worth mentioning as they impacted growth. The first is a ZAR 389 million deferral release in the prior year. The second is the impact of the rand roaming costs as we increased the number of sites. The third is a BEE charge of ZAR 226 million included in 2020. Excluding these adjustments, underlying growth was 2.2%, which is a great result given the top line declines in the first half of the year. Our International operations continue to perform well with strong commercial execution and increased focus on cost containment. This was offset by the challenges faced by Tanzania as a result of the biometric registration regulations imposed in January this year. Notwithstanding, the service revenue grew by 12.5% or 7.1% on a normalized basis, a solid performance. It is evident that the international portfolio has provided a good hedge against the weak rand during the period. EBITDA grew by 38,8%, further boosted by the accounting changes. On a normalized basis, EBITDA was up 9,4%. The performance in the International operations has been propelled by strong performance in M-Pesa and data. Data revenue increased 17,3%, and we added 2,3 million data customers in the year. We accelerated our 4G rollout across all our operations, resulting in increased data usage or data usage reaching almost 1 gig in Tanzania and Mozambique. Demand for our mobile financial services to the M-Pesa platform remains strong in all our international markets. Active M-Pesa customers increased by 9,2% to 14,7 million. M-Pesa revenue grew 29,8%, representing 18,3% of service revenue. We are seeing good progress across the portfolio on profitability with EBITDA margins expanding strongly by 0.8 percentage points on a normalized basis as a result of a strong revenue growth and continued focus on cost containment through our Fit for growth program. Safaricom announced the results at the end of April. Their performance was solid with service revenue increasing 4,8%, underpinned by strong growth in the customer base and M-Pesa revenue growth. Growth was achieved despite pricing adjustments that we made in response to the competitive environment. We have included profits of ZAR 3,6 billion from Safaricom and will be passing a dividend of ZAR 1.1 billion on to shareholders. On the regulatory front, we have made great progress this year. In March, we announced that we concluded our talks with the Competition Commission and ended into a consent agreement. This now concludes the matter fully as the tribunal has also approved it and made it in order. In terms of agreement, we have introduced price reductions across all our monthly bundles from 1st of April and providing free access to basic Internet for essential services and more affordable pricing. This is a continuation of our pricing transformation, while also signing a social contract with our customers and the commission. ICASA is also making progress in allocating high-demand spectrum. By their own account, they are aiming to complete this process by the end of the year. In the meantime, we have been allocated temporary spectrum in order to manage the increased capacity during crisis. The spectrum will naturally have to be returned before the auction, which is likely to happen before the end of the year. In Tanzania, there are 2 main regulatory issues. First a quick update on the biometric registration. From January, we barred 2,9 million customers who were not registered, of which 707,000 have already been reconnected. As of the end of March, we fully registered almost 75% of the base of over 15 million customers. The regulator has since halted further barring in respect to the COVID-19 pandemic. Secondly, there are further regulations on SIM card ownership. As of the 30th of June, an individual is allowed to own and use not more than one SIM card per mobile network operator for the use of voice, data and SMS services. Before taking questions, let's talk about the impacts from COVID-19 on our operations. We are in a privileged position as a telco to both maintain our business during this time, but also play a key and vital role in an ailing government to respond to the pandemic, businesses to continue working and customers to remain connected. Immediately, as the COVID-19 pandemic started escalating across our operations, Vodacom was at the forefront of lending support to governments. We have made numerous contributions both in cash and in kind across all our operations. These include making data and voice services available for critical and essential health workers, free-rating a number of government and health sites in order to keep people informed about the pandemic. We donated 20,000 devices with airtime and data to be used to facilitate the immediate collection and transformation of data to the National Department of Health COVID-19 Information Center. We have also extended similar interventions in Lesotho, partnered with entities such as Discovery to offer free virtual consultations to patients; ensuring that businesses have the necessary connectivity tools, hardware and data services to continue working; ensuring our networks have sufficient capacity and stability for customers to remain connected. We have free-rated schools and university portals to ensure students can continue with their education. This includes our e-school platform, which we saw a surge in enrollments. We have made person-to-person M-Pesa transfers free up to a threshold in most of our operations to enable the contactless payment method and ensuring that traders can continue. We'll continue to support our staff, our governments and our customers to fight the spread of the disease where possible. The period does, however, bring some uncertainty with it as well. We have seen some changes in behavior from customers in our network in the short term during lockdown or movement restrictions. Data traffic has increased an average of 20% in South Africa since lockdown started with the highest increases 2 weeks following the lockdown of up to 40%. Year-over-year, traffic is up 110%. We have seen a surge in gross connections in the 2 weeks leading to the lockdown. But once all stores closed, this has pretty much flattened out. But similarly, churn has reduced dramatically. Our stores in South Africa have just reopened with the easing of the lockdown restrictions on the 1st of May. Recharges in South Africa has slightly increased during this period despite the price cuts implemented on 1st of April. This is very encourage -- this is a very encouraging trend, but we did see some effects in our International operations where lockdown is in full force. These are however in limited scenarios. And finally, the free-rating of person-to-person services to M-Pesa does impact our revenue. It does, however, give more people the opportunity to enter into electronic money world and become long-term customers. Till will give you some insights into our balance sheet positions.

Thanks, Shameel. From a balance sheet perspective, we have a very strong balance sheet with comparatively low debt and immediate commitments, which should help us weather the situation. The strength of our balance sheet allows us to lead our business through volatility and certain levels of economic downturn expected over the short to medium term. We have a low gearing of 0.7x net-debt-to-EBITDA, limited debt repayments in the short-term with sufficient facilities to maintain liquidity. 90% of our debt is rand-denominated, limiting the foreign currency exposure. We also maintained a market-neutral debt structure between floating and fixed debt, which allows us to participate with half of our debt floating in lower interest rates, which we have seen in South Africa now, while the other half of fixed debt protects against significant adverse interest movements. We are also encouraged by the improved growth that we have been seeing in South Africa and sustained good performance in our International operations. However, these are unprecedented times and factors used for forecasting continues to change. As a result, we've taken the decision to postpone guidance until we have more certainty once the pandemic and its effects normalize. We will continue to transform data pricing for the benefit of our customers, grow our financial, digital services and M-Pesa across all our markets, grow data services in our International operations with increased penetration and expanded 4G services. We believe the strength of our balance sheet and our resilient business model will ensure that we are able to minimize these impacts -- the impact of COVID-19 and continue to create value for all stakeholders. This concludes our comments and we are now ready for any questions.

[Operator Instructions] Our first question is from JP Davids of JPMorgan.

Two questions from my side. Firstly, Till, just following up on the balance sheet comments you made. Just wondering if you could frame your risk appetite at the moment from a strategic perspective. So when it comes to things like M&A or investing in new growth areas, is this the time to be taking risk? Or is this the time you're going to keep powder dry? I guess, as a consumer being scared witless by government lockdowns, I was just wondering, from a corporate perspective, what the risk appetite feels like. And then separately, just on enterprise in the South African business [Audio Gap] sensitivities in that business segment, particularly if there are any big discretionary spend buckets that you could see come under pressure as COVID-19 plays out?

Okay. Let me take the first question. Just on balance sheet risk appetite. Look, I'll probably give you a bit of a balanced answer to that. Of course, we've been modeling different scenarios between a very positive view on the tenure, on the time period, COVID-19 will be with us and the economic impact and in that case, where it may take quite a while for recovery. So that's point one. Point two, we are obviously, from a balance sheet position in quite a strong position, I've commented on it earlier in the presentation. If you would just say you step back from everything and you say, today's net debt-to-EBITDA 0.7x, and if I were to allow to go to 1.5x, which is still a pretty comfortable level to manage, we could take on another ZAR 28 billion additional debt or everything else equal have basically EBITDA declining by the requisite amount. So from a risk appetite point of view, I do think it is very important to not miss strategic opportunities to continue to invest into also now. Therefore, I give you a balanced answer. Yes, you need to keep enough powder dry, which I think we have. And at the same time, you will going to see us continuing to pursue those opportunities that we think are pretty important for the longer term of the business. And also, short-term liquidity, which belongs to these aspects, I've commented on that earlier. We have doubled our committed facilities to bridge also any short-term working capital aspects. But let me also add, perhaps just on that one, my closing comment. We've not yet seen customers or business partners being substantially in arrears. I do expect that there is further pressure coming, certainly. What we've done so far is we've supported customers in -- to extend the payment terms on the top of collect proposition and we equally supported channel partners where we could, to some extent, with extended payment terms. All of this still falls to me -- fall for me into the managed category, which I think is good so far. Your question?

Yes. So on the enterprise part, I think we -- I mean, there will be pressure for corporates, but I think there will also be opportunities. And I think the way we're approaching the crisis, there's definitely some eventualities, as Till was explaining that we'll have to deal with, like bad debt and so on. We've taken steps to provide customers with deferred payment plans, what we call downward migrate, but extend your contract and tie them in for longer to try and make up their mind. So it's various different tools that we've created to assist customers through this and to minimize the loss of customers. There will be some bad debt impacts coming through from those that have gone into business rescue, especially if you believe that they won't emerge from out of there. And those -- you know who they are. We've already provided on those -- for those customers. In terms of do we see -- there will -- businesses will be under pressure. So we also see opportunities for them. We see opportunities in helping companies through their digitization journey. We see an opportunity in helping companies expanding on their work-from-home parts and so on as more and more services go online. And therefore, you'll see that we've forged a partnership with Accenture, Deloitte and a few others in a sell-with and sell-through arrangement which we also announced today.

The next question is from John Kim of UBS. [Technical Difficulty] It would appear that we're experiencing a little technical difficulty there. We'll move on to the next question from Jonathan Kennedy-Good of Standard Bank Group Securities.

Just 2 from me. I guess it's pretty difficult to determine what's happening to market share in South Africa, but I wondered whether you had any color on, given the fact that data prices have come down, you've narrowed the gap between yourselves and competitors, are you seeing any changes in SA market share at the moment? And then secondly, could you just give us a sense of your revenue exposure to government with regard to the renewal of the contracts with government when that has to take place?

Okay. So firstly, from a market share perspective, the last numbers we have is at December. Compared to December the prior year, we increased market share from 47.7% to 49.2%. That's revenue market share. And then in terms of the government renewal of its contract, it's about ZAR 1 billion of revenue, and it comes up in August 2020. So that's one of the things that we've built into our plan for this year. So it expires in August.

The next question is from Dilya Ibragimova of Citi.

I had a couple of questions, please. First is on your comments on customer behavior during lockdown. You mentioned the traffic increase and also increase in recharges. So looking specifically at South Africa in April and maybe this 1 or 2 weeks in May, would it be fair to assume that actual revenue -- customer revenue may be increasing year-on-year, just excluding the potential overall impact this lockdown would have on macro? And the second question is on Ghana. I think Vodacom is now in charge of managing Ghana operations. I was wondering if you could give us some color on what the arrangements are. Would Vodacom would be receiving any management fees going forward? And whether -- and how do you see the relationship between Vodacom and Vodafone Ghana changing in future, if so?

So firstly, on the traffic increase, what we've seen is obviously a jump in traffic. As we said, 20% pre-lockdown, 110% year-over-year. So I think it is fair to say that we have seen -- and we've seen recharges being slightly positive. So yes, we have seen an increase in customer revenue even though we've taken the impact of the price decreases. That said, I think we must not get overly carried away from that because it's early days still. So far, so good is the way we're looking at it. But we do think that there will be some impacts as we go into people return to work on the one side and the longer-term impacts on the economy. And therefore, that's why we've postponed guidance until the trends become a little bit clearer. In terms of Ghana's operations, essentially, the way it works is we are not looking to acquire and so on. We're only managing it on behalf of Vodafone. And yes, there will be management fees that are paid and it will support it from our international business operations that already supports the other 4 markets in our international portfolio. So not too much of a stretch for us, but it's more guiding and ensuring that management are making the right decisions and so on and so on.

And just a follow-up. Would it be -- where would the focus be in Ghana? Would you be -- is it -- is there -- are there any areas that you may have identified already where you'd like focus to be stronger, whether that's on the telco side or on the payment side? If you could share some thoughts there.

To be honest, I think it's still early days. We're still working through it, but we're currently constructing a -- together with the local management a plan and a plan of action and what we would need to be able to implement that plan in terms of capital investments, including what level of debt do we require, all of these type of considerations. We're looking at everything. So it only started from 1st of April. So it's still very much early days. And yes, we're still learning more and more about the market remotely because we can't get there.

[Operator Instructions] The next question is from Sunil Rajgopal of HSBC.

I just have one question. Can you please comment on the CapEx plans for this year? Should we expect any kind of a slowdown in spending for this year? And linked to it, how does the current environment impact your decision-making in terms of fiber or 5G investments?

Should I take the first part of the question, and you take the fiber question? Okay. Look, on the CapEx plans, as I said, on the one hand side, we will retain a solid level of CapEx investment in South Africa. We've closed the year on ZAR 9.8 billion in South Africa last year. I think it might be a little less as we now go into COVID-19, but as I said, solid investment level in order to support the growth. But at the same time, that's probably just the normal disclaimer that you can assume. We will retain flexibility, both to react short term to changing priorities or changing needs if we see them coming. I think we've got a pretty good plan, and I think everything is covered, but we will retain a certain level of flexibility to also respond short notice if we have to. And then the fiber topic.

Yes. So on fiber, yes, we will continue to look at fiber and we will continue to invest in fiber as part of our CapEx portfolio, both for enterprise and consumer. But also, we will look at inorganic opportunities should they present themselves.

Next question is from Alastair Jones of New Street.

Just wanted to talk through the traffic increase that you've seen with the COVID impact of 20% on average. I was wondering if you can just split that up between prepaid and contract. I mean, is there one that's the traffic has been a lot more prevalent or the traffic increase has been a lot more prevalent? Or is it sort of pretty much consistent across both prepaid and contract? And then just secondly, I think -- hopefully, I'm not wrong, but I think you sort of mentioned about a ZAR 1 billion impact in terms of revenues from the CompCom decision that you or agreement that you made. I was just wondering, given what change in terms of traffic flows, whether that ZAR 1 billion, if I'm correct on that, but if that ZAR 1 billion has changed in your view. I mean, obviously, I know it's early days, but just trying to get a sense if maybe elasticity is just a little bit higher or quite a lot higher, obviously, post-COVID and actually that ZAR 1 billion impact might be lower.

So I mean, firstly, on the...

Traffic between segments.

So the traffics between segments, I would say, probably a little higher in contract and the enterprise segment specifically in contract because companies were providing -- we did see a lot of companies taking APNs and so on for their staff. So it did -- it definitely created a spike there. But yes, we also saw better usage in prepaid as well.

Just on the second question on CompCom effect. So when we sealed the Competition Commission settlement agreement, we quantified it was about 1.5 percentage points of service revenue drag at group level. So if your question is, are you seeing that holding true, the reality is we've got just a couple of weeks into it. In those few weeks, we're actually impacted by something that obviously impacted the entire world, COVID-19, which makes it a bit harder to really isolate trends. But by and large, I would say that what we have forecasted and expected from CompCom, both in terms of the price reduction which was implemented, plus the requisite traffic growth, and as a result the elasticity, I would say, is holding true. And remember, price reductions took place 1 April. And from that moment, you actually start working yourselves through greater utilization and traffic nearer and nearer to your breakeven point of elasticity, which means you carry in your first 1 or 2 quarters more of the downside effect than basically in your third and fourth quarter. Pretty similar revenue profile from a build-up as we've seen a year ago when we had the out-of-bundle rate cut on the back of the end-user subscriber chart, where you see basically, and this is how we exited the year, a lot stronger revenue growth post reaching the elasticity point.

Yes. And I mean, obviously, you did get the boost, as you said earlier, in the -- during this COVID period. But as Till says, that's really the longer-term -- the impact that we see coming through for the year and that's the trajectory of how it will play out. And hopefully, some of it -- some of the increased traffic that you've seen through COVID-19 sticks and basically changes behavior.

Well, Shameel, John couldn't ask his questions earlier, but 3 questions. What's the timing for the decision in Ethiopia?

Shall we take it one by one?

Yes.

Okay. Perfect. John, just give me one second, I'll just tell you on the timing. We have basically seen on the 28th of April, the government of Ethiopia issued some directives for public consultation with response day today. We have responded to it. So you can see there is activity taking place. But at the same time, we are still waiting for the invitation to express our interest. So that has not yet been published or this has not yet been requested. We think that this is going to happen still within the next couple of months, but all subject to probably COVID-19 and their capacity or their time plans around this auction preparation. But again, things are happening, and we are part of the consultation process and, obviously, also interested in continuing as a consortium together with Safaricom and other investors to assess this opportunity.

His second question, what are your thoughts or plans regarding the rules on foreign ownership in mobile money assets there?

So I think -- I mean, obviously, we need to build it into the plans in terms of how we can build that in. Initially, what's encouraging is that they're starting to look at opening up mobile money. Remember, in the previous version, there wasn't -- the mobile money wasn't being considered or going to be allowed. So now there is potentially restrictions on foreign ownership. We can still build that into a workable model, and so we will work around that. But it's good to know where you stand because then, essentially, you can build that into your business plans and take into account any of these requirements. So what's becoming clearer now, we're updating our plans, we'll update it accordingly, but that will also determine the kind of purchase price that is put forward on this.

And then the final question. Can you quantify the impact of 0-rating offerings in mobile money?

Still early days to be honest, and I think we -- but there is definitely a negative effect coming through on M-Pesa and it is subduing the growth of M-Pesa. But a lot of this is temporary. So if we want to -- and that's one of the things that we want to further proof points on before. That will also assist us with the guidance going forward because they -- at the moment, the 0 rating is for a definitive period. And -- but it has the benefit that the customers will stay with you for a lot longer post the period.

Exactly. And just adding to it. I think there are 2 things short-term negativity, as basically 0 rate, definitive period so far in the market. We need to see how that evolves. And thirdly, longer term, of course, it helps converting more customers to stay on M-Pesa as basically, a, you have incentivized it now, so the free P2P; and b, going cashless is a benefit in this COVID-19 scenario.

Next question is from Ziyad Joosub of Nedbank.

Just one question, please. And it's got to do with your quarter 4 2020 data traffic growth acceleration. It's quite interesting because quarter 3 is generally your Christmas quarter, peak quarter, and I've never seen such a strong acceleration in data traffic growth. It looks like data traffic growth was close to 80% or just above 80% in quarter 4. Given that we can see that a lot of the service revenue growth came through fixed and other service revenue line, it seems that there was a lot of data price transformation in quarter 4. Did you guys push through any price cuts in quarter 4? And what I'm trying to get at is, has a lot of your CompCom price transformation or at least a bit of it already been done in quarter 4?

Okay. So what happened in quarter 4 was essentially, remember it's also Christmas, so that means we give away things, so that filtered into -- obviously, into January. And we continued the Shake promotion for longer, which we normally would have stopped earlier last year. So last year, we stopped it early in January. This year, it continued way into February what the -- with the Shake promotion continuing. So that was a big part of the free traffic, if you like, that we were giving. There wasn't any big price transformations in the fourth quarter because a lot of it then obviously comes from the price change 1st of April. That said, what we did do after February is we started -- we pulled back on a lot of the promotions and cut the promotional or free traffic quite substantially going into March, okay, ahead of the CompCom changes. So the traffic that you're seeing now and limited the amount of free traffic back to, say, pre-Christmas levels and effectively right now because also going into the price drops we needed to also make sure that we get the elasticity coming through strongly. So the traffic that you're seeing now is more monetizable than it was in the fourth quarter.

[Operator Instructions] The next question is from [ Salome Maruma ] of UBS. [Technical Difficulty] Sir, it would appear we're having some technical difficulties on that line. [Operator Instructions] Sir, we have no further questions in the queue. Do you have any closing comments?

Yes. Thank you. This is a pleasing set of results in trying circumstances. Our priority is to ensure the safety of our staff and customers, while at the same time, providing customers with a high customer experience standards, which they may have become accustomed to. It is also time when our balance sheet strength, prudent diversification and resilient business model will stand us in good stead. Thank you for joining us on today's call. If there are any other questions that you may have, please reach out to the Vodacom investor team. Enjoy the rest of your day.

Thank you, sir. Ladies and gentlemen, that concludes this conference call. You may now disconnect your lines.