Vodacom focuses on data as profit drops after debut

By Gugulakhe Lourie

JOHANNESBURG (Reuters) - South African mobile operator Vodacom (VODJ.J) vowed to focus on expanding its data business as it takes on rival MTN (MTNJ.J) across Africa, as it posted lower profit a day after making its market debut.

Vodacom, majority owned by Vodafone (VOD.L), reported a 21 percent drop in full-year headline earnings per share as finance costs jumped on loans to fund a data acquisition, and due to one-off charges linked to an affirmative action deal.

Shares in Vodacom dropped 0.58 percent to 58.46 rand, lagging a 2 percent firmer Johannesburg Top-40 blue-chip index .JTOPI. Vodafone also reported earnings on Tuesday.

Vodacom, which made a strong debut on the Johannesburg Stock Exchange on Monday, warned of tough conditions ahead in the key markets of South Africa and the Democratic Republic of Congo as an economic slowdown hits mobile spending.

Chief Executive Pieter Uys said the company was poised to tighten its belt if conditions worsened.

The listing was part of a broader deal that gives Vodafone majority control as it seeks to expand in high-growth African markets.

But while Vodacom is the No. 1 in South Africa, the results underscored how it lags rival MTN (MTNJ.J) across the rest of the continent, with subscribers up 16.5 percent in the year to end March to 39.6 million, compared with MTN's 100 million users.

Vodacom, which is seeking to offset the effects of a maturing domestic cell phone market, plans to focus its energies on data provision in Africa, where it leads MTN, and Uys said it would keep expanding into corporate data and Internet services.