Vodacom's Egypt acquisition spurs 29.1% surge in Group service revenue

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May 13, 2024
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2 min read
Vodacom
  • Vodacom, a mobile network operator, has reported increased service revenue for the fiscal year ended March 31, 2024. Vodacom South Africa generated R61.6 billion ( $3.36 billion), in service revenue, up 2.6% from the previous year.
  • Vodacom revealed that R11.1 billion ($606 million) was invested in network resilience, new spectrum assets, and IT platforms. Previously, it invested R11.17 billion ($639 million) in 2022/23 and R11.15 billion ($628 million) the year before.
  • Vodacom acknowledged reaching over 200 million customers, stating that the milestone occurred in a year when the company celebrated three decades of operation.

Vodacom stated that its Egypt acquisition, combined with South Africa's performance as its largest market, resulted in a 29.1% increase in the group's service revenue. Thus, Egypt now serves 48.3 million customers, up 6.2%. It saw a 10.9% increase in data customers, which led to a 41.8% increase in data traffic.

Consequently, Shameel Joosub, Vodacom Group CEO said, “We are encouraged by the meaningful steps taken by Egypt's government to support economic growth through foreign direct investment and foreign exchange liquidity. Pleasingly, the dividend declared by Egypt to the Group in the first half of the financial year was repatriated to South Africa in March 2024.”

Integrating new services, including the consumer contract segment and prepaid mobile data, fueled revenue growth. New services, including digital and financial, fixed and IoT, contributed 20.0% of group service revenue. In South Africa, new services increased by 11.2%, accounting for R10.2 billion ($556 million), or 16.6% of service revenue.

Its financial services customers increased by 11.8% to 78.9 million, with an annual transaction value of $381.2 billion. 

“The 7.9% service revenue increase from financial services to R3.2 billion [$174 million] was largely driven by our insurance business and payments, while Airtime Advance remained an important enabler of digital inclusion,” the CEO said.

Furthermore, it reported a 10.8% drop in headline earnings of 846 cents per share (cps), impacted by events such as several start-up losses in Ethiopia, higher finance and energy costs, and lower exchange rates.

Vodacom's VodaPay concluded the period with 10.4 million downloads and 5.8 million registered users. Meanwhile, Vodacom announced in November 2023 that it would replace the My Vodacom smartphone app with VodaPay, its super app, early in 2024 to provide customers with a unified interface for interacting with Vodacom and its partner companies' services.

Besides, it intends to enable affordable connectivity through the proposed acquisition of a joint venture stake in Maziv, a South African fibre company. The transaction is pending review as of May 20, 2024.

Maziv stated in August 2023 that the Commission's recommendation to prevent the Vodacom acquisition does not end the merger process, and it will approach the Competition Tribunal to present information and make its case for the merger's approval. 

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Meanwhile, M-Pesa revenue increased by 21.4% across Vodacom's markets in the Democratic Republic of Congo, Lesotho, Mozambique, and Tanzania, accounting for 26.5% of international business service revenue.


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