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Vodacom revenue lifted by strong growth in South Africa

FILE PHOTO - A branch South African mobile communications provider Vodacom in Cape Town is shown in this picture taken November 10, 2015. REUTERS/Mike Hutchings

JOHANNESBURG (Reuters) - South Africa's Vodacom Group (VODJ.J) reported a 2 percent increase in first-half service revenue on Monday, lifted by rising demand for data services in its home market.

Vodacom, majority owned by Britain's Vodafone (VOD.L), has invested heavily in its network to provide faster internet services as increasing numbers of consumers use smartphones.

Group service revenue rose 2 percent to 34.7 billion rand (1.84 billion pounds), while group revenue increased 4.6 percent to 42 billion rand.

The group said it added 2.9 million customers in South Africa, breaching the 40 million mark for the first time. It added 1.4 million customers in its international markets, an increase of 11.4 percent.

Vodacom, which gained a 35 percent stake in Kenya's Safaricom (SCOM.NR) as Vodafone consolidated two of its African interests in May, said revenue at Safaricom's money transfer service M-Pesa rose 14 percent in the first half.

Headline earnings per share - a profit gauge that strips out certain one-off items - came in at 445 cents in the six-months ended September, compared with 440 cents a year earlier.

Vodacom, which is still being investigated by the Competition Commission for suspected market dominance, declared an interim dividend per share of 390 cents, slight lower than the previous year.

Shares in the company fell 2.6 percent to 148.50 rand at 0742 GMT.

(Reporting by Nqobile Dludla; Editing by Joe Brock and Louise Heavens)