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Revenue
Revenue is measured at the fair value of the consideration received or receivable from the
sale of goods and services in the ordinary course of the group’s activities. Revenue is presented
net of indirect taxes, estimated returns and trade discounts.
Revenue from the sale of goods and the rendering of services is recognised when it is probable
that the economic benefits associated with the transaction will flow to the group and the
amount of revenue, and associated costs incurred or to be incurred, can be measured reliably.
The amount of revenue is not considered to be reliably measurable until all contingencies
relating to the sale have been resolved.
Postpaid products typically include the sale of a handset, activation fee and a service contract;
and prepaid products include a subscriber identification module (SIM) card and airtime.
Multiple element (or bundled) arrangements are divided into separate units of accounting,
and revenue is recognised through the application of the relative fair value method, resulting
in the proportionate allocation of any discount to all elements in the bundle.
The group operates loyalty programmes in certain entities where customers accumulate
points for purchases made, which entitle them to discounts on future purchases. The reward
points are recognised as a separately identifiable component of the initial sale transaction by
allocating the consideration received or receivable between the reward points and the other
components of the sale such that the reward points are initially recognised as deferred income
at their fair value. Revenue from the reward points is recognised when the points are redeemed.
Breakage (forfeiture of points) is recognised when redemption becomes remote.
The main categories of revenue and the bases of recognition are as follows:
Airtime and subscription, data, digital and SMS
- Airtime, data and SMS: revenue is recognised on the usage basis commencing on the date of activation;
- Subscription: revenue is recognised over the period that enables the customer to access network services; and
- Digital: revenue is recognised on the usage basis, and includes services such as value-added services, content, mobile money, etc.
The terms and conditions of postpaid bundled airtime products may allow for the carry over
of unused value or minutes. The revenue related to the unused value or minutes is deferred
and recognised when utilised by the customer or on termination of the contract. Breakage
(forfeiture of unused value or minutes) is recognised when the unused value or minutes expire
or when usage thereof becomes remote.
Revenue received on prepaid contracts is deferred and recognised when services are utilised
by the customer or on termination of the customer relationship. Breakage is recognised when
the prepaid credit expires or when utilisation thereof becomes remote.
Interconnect/roaming
Interconnect/roaming revenue is recognised on a usage basis, unless it is not probable on the
transaction date that the interconnect revenue will be received, in which case interconnect
revenue is recognised only when the cash is received or where a right of set-off exists with
interconnect parties in settling outstanding amounts.
Devices
Revenue on the sale of devices to third parties is recognised only when risks and rewards of
ownership are transferred to the buyer.
| |
2017
Rm |
|
2016
Rm |
|
| Airtime and subscription |
64 633 |
|
79 300 |
|
| Interconnect and roaming |
12 396 |
|
15 476 |
|
| Data |
28 212 |
|
23 627 |
|
| Digital |
13 048 |
|
14 022 |
|
| SMS |
2 701 |
|
3 264 |
|
| Devices |
8 406 |
|
8 490 |
|
| Other |
3 419 |
|
3 741 |
|
| |
132 815 |
|
147 920 |
|
| 1 |
In 2017, the group changed the categories of revenue that are presented to align with the way the group manages
and reports data, digital and devices revenue internally. The comparatives have been updated accordingly. |
The group’s unearned income at the end of the year amounts to R5 775 million (2016: R6 449 million).
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