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 3 months ended 30 June 2021. Vodacom Group's CEO, Shameel Joosub, will host the conference call. Before I hand the call over to Shameel, 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.vodacom.com. Alternatively, if you'd like a copy of the trading update sent to you, please e-mail Investor Relations website at [email protected]. [Operator Instructions] Also note that this event is being recorded. I would now like to hand the conference over to Shameel. Please go ahead, sir.

Thank you, Chris. Good afternoon, and good morning to those joining us on the call from the U.S. Thank you for joining our first quarter trading update call for the financial year 2022. I'm joined by our Group CFO, Raisibe Morathi; as well Raisibe Morathi; 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-led business model means that we will work tightly to support South Africa's recovery whilst 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-19 vaccine rollout through our mVacciNation platform that manages appointments and stock readiness and the logistics chain around the vaccine distribution. In South Africa, the National Department of Health is leveraging our mVacciNation platform to manage the deployment of vaccines. This is in addition to the ZAR 87 million financial pledge made by Vodacom and Vodafone during the quarter to provide logistics support and cold chain technology to deliver COVID-19 vaccines to underprivileged and rural communities in the DRC, 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 Safaricom was awarded a mobile telecommunications 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 South African super-app, VodaPay. More than 70 merchants have already joined our VodaPay ecosystem ahead of its highly anticipated launch in the coming months. We see this super app as a precursor to M-Pesa's evolution, supporting accelerated growth across our financial service businesses and assisting us in connecting the next 100 million customers so that no one is left behind. Moving on to the trading update for the quarter. Our performance was characterized by sustained 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 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 Safaricom. Normalized group revenue growth was 14.2%, 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 this headwind, we reported revenue growth of 9% to ZAR 24.8 billion. Then on CapEx and to further enhance customer experience, we invested ZAR 3.4 billion in our network across the group in the quarter, including the expansion of 4G coverage, speed and capacity. Shifting now to South Africa. Service revenue increased 5.2% as people continue to work, educate and learn from home. The revenue increased 13.2%, supported by equipment sales as we lapped the impact of retail restrictions in the prior year. In the contract segment, Vodacom business delivered strong growth supported by our 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%, and we now have 5.7 million IoT connections. In the prepaid segment, mobile customer revenue increased by 1.8%, supported by our initiatives to manage the number of days a customer remains active on [indiscernible]. This growth was achieved despite the base effect of a strong quarter in the prior year. We added 532,000 customers in the quarter with 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 face challenges to the consumer wallet, which impacted spend potential. Adjusting for these quarter-on-quarter impacts, our underlying prepaid ARPU increased 0.5% from the fourth 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 a very strong comp that we were betting against. Smart devices on the network increased 30.3%, while 4G customers increased nicely, up 26.8% to 16.4 million. Financial Services in South Africa continued on its growth trajectory with revenue increasing 19.1% to ZAR 0.6 billion for the quarter. Airtime Advance amounted to 46% of total prepaid recharges versus 38% in the prior year and enabling customer convenience. Our insurance revenue increased 13.4% with policies up 14.8% to ZAR 2.2 million as we continue to expand our portfolio of products. From a CapEx perspective, we invested ZAR 2.9 billion 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. M-Pesa revenue increased 43.2% as we captured platform economics following our COVID-19 intervention on a free person-to-person transfers last year. M-Pesa customers increased by 14.3% to 16.8 million, representing 48% of our international customers. Our M-Pesa ecosystem, including Safaricom, processed USD 25 billion a month in transaction value in the first quarter, up an impressive 62.6%. M-Pesa 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 was Safaricom's recent launch of M-Pesa super app with many app capabilities. We will replicate this app's progress across all our M-Pesa markets, also leveraging the learnings and capabilities of the VodaPay 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 20.9 million 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 regulatory front, we are grateful for the extension of the temporary spectrum in South Africa, which has supported network capacity in the period. We are, however, disappointed by the ongoing delays in allocation of high-demand spectrum. We are hopeful that the process -- mediation process can find a timely solution, and we at Vodacom are committed to this process. We see the assignment of spectrum being instrumental to the data pricing dynamic of our largest markets. Then wrapping up my review with a few words on the outlook. Dealing with the effects of the COVID-19 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&A questions.

Thank you, Shameel. Hi, everyone, and thanks for joining the call. As a reminder, we do not disclose margins or profitability metrics in our quarterly trading updates. 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 associated investment in Safaricom are disclosed on a biannual basis and, therefore, not included in this quarterly update. With that, Shameel and Raisibe are ready to answer any questions you may have. Chris, over to you.

[Operator Instructions] Our first question is from Preshendran Odayar of Nedbank CIB.

I've got 3 from my side, if I can. First one just about -- 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 Cell C and Telkom along with your financial services and IoT revenue sits. And your nonservices revenue line is where the leasing revenue from, 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 is that going forward? And secondly, the leasing revenue from Liquid, that sits in the non-service revenue line. It doesn't look like it's come in. So I just wanted to get some clarification on time lines 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 Rain's 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 patch because we saw CIVH's rights issue and its plans to lower debt, so as this asset looks a little bit more sexy and attractive to you and within your fiber expansion plans.

Preshendran, thanks for the questions. I'll help with the clarification question and then hand over to Shameel and Raisibe for the more detailed questions on Liquid, Rain traffic and the fixed line aspirations. Just in terms of the clarification, you're broadly right in terms of other service revenues. So yes, that includes IoT. Yes, that includes wholesale revenue. And -- but it's not all of the financial service revenue. Actually, the majority of financial service revenue will sit within the customer service revenue. Both have been prepaid and contract depending on what type of financial service we are selling. And then you are correct that the Rain agreement is captured within that other nonservice revenue line item. To just round off on that, you're asking about the contribution to grow 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. Instead, 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 Shameel on Liquid and traffic-related questions and then on the next one.

Yes. So I mean just on the Liquid part is still getting very low traffic because it's still -- it's 5G roaming and such, and there's not a hell of a lot happening in that space as yet. So it's still quite light. We have in the envelope that we have, we're praying in terms of commitments, seek to maximize some of the opportunities around traffic where we're paying for capacity that we're basically taking advantage of, 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.

And then the next question was on fixed, and you're asking about fiber. So remember, when we have roughly about 145,000 homes passed on fiber. So that is what it is related to.

Yes. Growth remains -- the growth in fixed remains very strong. We've been growing 70%, 80% over the last period, over last year in terms of fixed deployment both from an ISP perspective and a resell perspective as well as growth in terms of connecting the homes that we've already passed.

Sorry, Raisibe, that 145,000, that's homes passed by your own fiber network that you guys have built out, right? Is that correct?

Correct. Yes.

And then just if you can, I mean, CIVH, 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. But effectively, what we are, as we've said to you, we basically -- we will finalize our -- and we've given ourselves a target to finalize our fiber plans, which, as I said at the full year, will either take the form of a fiber JV, but we -- all are potential small acquisitions or potential, let say, potential acquisitions in the space. So we are looking at do we move our fixed assets our -- into a separate vehicle, bring on a partner and further accelerate our fiber builds.

The next question is from Maurice Patrick of Barclays.

If I could ask a bit just to dive into the 43% growth in normalized M-Pesa revenues. So you saw a pretty significant step-up. Shameel, in the presentation, in your prepared remarks, you sort of referred to the fact that you were able to charge for the service rather than -- elements that have been free last year. Could you sort of talk a little bit to things like what is the elasticity around that? Giving a service rather free, obviously, that may people use it and then you start charging for it, and presumably some realize the benefit of using it, another sale, now you're accounting for [indiscernible]? Can you walk us just through like the extent to which how this is running through with the 43% number? Is that a good run rate going forward?

Sure. Yes. I mean you would have seen that, firstly, on M-Pesa, there was acceleration of the customer base from last year. So when we 0-rated M-Pesa, we saw 2 effects. One effect came from increase in customers. So -- and now we're 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 have are stuck. So that's the first part. Increased customer base has remained with you, and that's very positive. And the second part is the number of transactions have increased quite dramatically. So we saw during the free period, the traffic was up. I think it was 68%. And you'll see for the quarter, we're saying that 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 has stuck with us. So that's why we call it platform economics [ with life ] because that 0 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 across all operations.

I mean, that's very helpful. I mean I believe, Shameel, that 63% number and 68% have been Safaricom. Was it broadly similar in the Vodafone's national 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 -- and growth of transactions increasing as well. Also, important to understand is M-Pesa Africa -- now the way we operate is that we lay certain foundations and then a year, 18 months later, you start to see the benefits of that flowing through. I say M-Pesa 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 that all can be very similar to what we have in Kenya. So the intent always is we're launching Kenya first and then we replicate across the market. So you'll see we've launched the super app or the M-Pesa app, which includes mini-app capabilities from end 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 in 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 full lease-up product rolled out to all the markets, making sure that we have consistent platforms. And so through the year, you will see more of these products and services in different markets come into play.

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 to have signed up by the time you launch?

So the super app is very much about eventually you'll get to 100s, 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 Massmart, which includes Makro, Game, Builders' Warehouse and so on. And then also people like Clicks, Clicks Group, and Edgars and all that in the -- or the old Edcon or Retailability, 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 app to 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 app.

The next question is from Jonathan Kennedy-Good of JPMorgan.

Just 2 questions from me, please. Saw some comments, I think, by Nick Read at Vodafone's results talking about potentially spinning out M-Pesa. I just wondered of any thoughts have changed around keeping the business within the group or potentially unlocking value there. And then secondly, 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 set if I'm correct. And whether or how you see the time line for spectrum play now, now that we've seen another kind of 3-month delay in.

Okay. So to be clear, Nick didn't say we're spinning off the company or anything of that sort. What he 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 part, where effectively we have split out the M-Pesa companies into separate entities. And in the -- that's now, of course, in the Vodacom's table. 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 is growing at different multiples, okay? And the multiples are hugely attractive. We're seeing multiples of 26x-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 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 material it's becoming in our businesses. So yes, we're not -- we are keeping optionality though. But ideally, all of you will see the light and give us value. In terms of the spectrum auction, I think we -- look, where we are is twofold. One is the court case. The court case, I think, is coming up in September. And so that's the one side. It caused us added work and time. So the one side is the court case. And of course, with the court, you can always have your 11th hearing and then they might -- 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 has indicated by the end of March, that takes away one of Telkom's primary arguments that expect your auctioning spectrum that's not available. So that's the one side. But ICASA has added 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 I call it Telkom permitting is that Telkom -- as always, the rest at Telkom will find the reason to delay or play games. That's always there. But it does look more positive, and it does look like they're coming to the table. I say that thing is closed. Spectrum is extended to end of August, but we think that if ICASA finds the solution, they'll continue to extend that.

The next question is from Myuran Rajaratnam of MIBFA.

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 then 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 playing in? I've got a few more questions.

I think it's more an internal thing. We have taken certain actions on the Facebook Flex, 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 would have -- 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 have 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, Shameel, I mean, the ARPU seems to be coming down as well. So they're not necessarily the lower spending customers who are going out.

The ARPU part, we should just be careful, ARPU in total versus last year because, remember, they -- you have the bigger base now. So last year, you had that massive increase in ARPU, remember, because of the volumes and the big comp that we're betting against. So I think more important to look at quarter-on-quarter than it is to look at year-over-year.

Sure. But just the trend line seems strange.

It was 0.5 difference in ARPU.

If you normalize for everything that went wrong, right?

Well, not for everything that went wrong [indiscernible] 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%. That is year-over-year, okay? So yes, quarter-on-quarter. Adjusting for these impacts, basically it was 0.5%. So remember, we also decreased prices by 14%.

For sure. Okay, fair enough. My next question is the wholesale revenue grew, which is nice to see. And I think JP was kind enough to say that it had a 1% boost to the revenue growth, right, in South Africa. But presumably, that didn't come full bang on the 1st of April, right, so it sort of came in waves through the quarter. So is it fair to assume that's just the average improvement? Or the exit rate is probably like 2% or more?

No. I would say most of the traffic is not -- all of the traffic is on from the 1st of April, yes. So remember, it came in already from 1st of March. So you've had a full quarter of revenue.

Okay. That's helpful. The next one is a quick one on Airtime Advance. 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 advance 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 on such a big base. Just some thoughts on that, please, Shameel.

So look, I think, to be honest with you, in terms of 46%, 47%, I think we exited the quarter like 47% of Airtime going through it. I do think there's a limit on the one side. If you think about it a bit more crudely, 47% of the time people are lending Airtime from me before buying Airtime from you, which is interesting, I mean, on the one side. The benefits that flow from it is a couple of fold, right? 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 Airtime 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 or no balance. So if you didn't have money, we borrowed you some. So 4 million times a day someone tries to buy something, doesn't have money and we extend an advance. The interesting part is that now what we do is we do what we call partial bundle completion. So you've got 5 in your wallet, and we push you 10 in bundle, right, we basically borrow you the 5 in increment. So that has the ability to do 2 things. One, it's pushing up spend. So a lot of the benefit also comes through in telco of this product, right? But secondly, it increases your active base 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 Airtime 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 markets. So I think that's an important part. Now you'll see that the other interesting thing is that the 17 million customers provided are provisioned but only 10.8 million that are 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 the Airtime is big. So that's the one part. 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 [ need ], right, which will create another growth trajectory for the [ Nando's ]. And course, that a lot of those things will come to more -- will come to light in the VodaPay platform.

Great. It sounds like a very clear product the Advance 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. 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 then through the year in terms of impact. 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 put forward. But remember, every department, now all 460-odd 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, I'd say, in the half year at least.

The next question is from Nadim Mohamed of SBG Securities.

Just 2 questions from my side. Firstly, it seems like the turnaround in Vodacom International was quite broad-based. I see voice revenue up as much as 7.6% on a normalized basis. So just wondering, is that because of an economic recovery in those markets? Or is it due to specific intervention that you've put in place in those markets? And then secondly, we came across -- the M-Pesa business still happening there. I think this is a very, very exciting opportunity for M-Pesa. I was just wondering how [indiscernible] in that and are you planning to launch it in other markets? Even South Africa, I think there could be some relevance here as well.

Nadim, would you mind repeating the second question around M-Pesa. We lost you at the end there.

Apologies. Maybe my connection is not good. This is asking about the M-Pesa business app that was launched, I think, last -- merchants. It seems to be scaling up quite well in market. And I was just wondering how far are you on the J-curve in that. And are you planning 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, right, it is broad-based. Revenue is coming from different areas. I think it's coming from 2. 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 CVM part, specifically on voice but also on data. And now we're making sure that the CVM activities also extend to M-Pesa. So there's a deliberate actions like morning offers, these types of things. And across the group, what we've done, including South Africa, is 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, 1 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 against those customer bases to try and increase the active base. Because if we can increase the active day 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 simple view, no customer puts the phone into their drawer 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, in that respect, we think we can achieve better results. So that's a key focus for us. I think as far as M-Pesa 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, where we should be able to grow the Financial Services portfolio high teens, early 20s, I would say, for the foreseeable future. So I think that portfolio will grow continuously. That said, I mean, we basically have to -- we're also targeting it from 2 segments, to your point. The one segment is the consumer part and then in comes the lending, the low marketplaces, I mean making sure the full ecosystem of 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 price markets. And so we're rolling that out to all the markets as well. We're 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, what's it, 320,000-odd merchants, probably more during the quarter. But that's been a big play for us. And the other markets, we 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 app and so on. And that merchant app that you've seen is, of course, from M-Pesa Africa. So then also the -- and then in South Africa, of course, we've got a very well-oiled ecosystem, where effectively we have the point-of-sale devices, which we're now rolling out that are scaling up; the loans that we're extending from the point-of-sale devices from business advances to -- all the way from ZAR 10,000 to ZAR 1.5 million. Then, of course, VodaTrade platform where you can order from all the FMCG companies through the platform. And we're now introducing invoice financing, which will be new. And all of these products have to create the ecosystem that we're pushing, which is a 2-sided ecosystem of both merchant and consumer.

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. Enjoy your weekend. Thank you.

Ladies and gentlemen, that does concludes this event, and you may now disconnect.