Table of Contents
Key Points
- Vodacom updates medium-term guidance, forecasting double-digit EBITDA growth through 2030, driven by strategic bets in Egypt and fintech.
- The acquisition of a 55% stake in Vodafone Egypt boosts Vodacom’s Africa growth strategy, benefiting from regulatory support and currency stability.
- Vodacom faces high capital expenditure but is focused on network efficiency and a potential stake in fiber operator Maziv to strengthen its South African position.
Vodacom Group, led by South African executive Shameel Joosub, is positioning itself for a return to robust growth following a decade of real-terms earnings stagnation. The Johannesburg-listed telecoms giant has updated its medium-term guidance to reflect stronger momentum, signaling a potential turnaround fueled by strategic bets in Egypt and fintech.
At a recent investor day, Vodacom raised its EBITDA growth forecast to double digits through 2030, up from earlier projections in the high single-digit range. The company’s renewed guidance, supported by improving macro conditions and accelerating adoption of digital services, has caught the attention of institutional investors. “This puts Vodacom back on the radar for portfolio managers,” said Dumisani Chiume, investment analyst at Sanlam Private Wealth. “There’s real upside potential in their Egypt play.”
Egypt leads the rebound
Vodacom’s December 2022 acquisition of a 55 percent stake in Vodafone Egypt has become the centerpiece of its Africa growth strategy. According to Chiume, the North African operation is now outperforming inflation, with a regulatory tailwind enabling long-overdue price hikes. “Regulators are finally permitting tariff increases,” Chiume said. “This creates a supportive environment — rare in African telecoms.”
Currency stability in Egypt has also improved, with the pound beginning to find footing after a bruising 40% devaluation. That reduces forex-related drag when Vodacom consolidates Egyptian earnings into South African rand.
In addition to mobile revenue, the company is seeing growing adoption of its fintech arm, VodaCash, in Egypt’s largely underbanked population. Financial services and mobile data revenue have both posted double-digit growth in the market, with further acceleration expected. “We believe earnings from Vodacom’s fintech platform will scale meaningfully as adoption rises,” Chiume said. “It’s a long runway.”
Operational efficiencies and strategic delays
Vodacom benefits from having operating costs in Egyptian pounds, which helps protect the company from the volatility of the U.S. dollar, especially when it comes to expenses related to towers and network operations.
However, the company still faces challenges with its high capital expenditure. Vodacom continues to invest significantly in its network infrastructure across Africa to meet rising data demand and maintain its service quality. Joosub has pointed out that network sharing could help reduce some of these costs, particularly in South Africa.
With a subscriber base of over 210 million users across the continent, Vodacom's scale supports its long-term investment strategy. In its Q3 update for the period ending Dec. 31, 2024, the company saw a 1.6 percent year-on-year revenue increase, reaching R39.53 billion ($2.1 billion), despite pressures from a stronger rand.
Joosub, who owns a 0.09 percent stake in Vodacom worth nearly $13 million, has been at the forefront of the company’s efforts to upgrade its digital infrastructure and broaden its revenue sources. Looking ahead, the company is also pursuing a 30 percent stake in fiber network operator Maziv. Although the R14 billion ($790 million) deal has faced delays, with the deadline now pushed to Feb. 14, 2025, due to regulatory reviews, completing the deal would strengthen Vodacom’s position in South Africa’s growing fiber broadband market.
