Latest news with #Joosub
Daily Maverick
20-05-2025
- Business
- Daily Maverick
Vodacom banks on long contracts to help it move ‘beyond mobile'
The easy read on Vodacom's annual results shows a company in transition, but a deeper dive shows a mobile network operator posing as a finance company that's quietly shifting financial risk on to consumers. For the year ending 31 March 2025, Vodacom Group reported a modest 1.1% increase in revenue to R144.5-billion. But the company would prefer you focus on the 'normalised' version of the story, where service revenue didn't shrink by 0.1% but rather grew by a healthy 11.2% once currency movements and other adjustments were stripped out. This raises the now-familiar question: when does normalisation stop being clarity and start becoming creative accounting? 'Our normalised results showcase the underlying strength of our operations,' said Vodacom Group CEO Shameel Joosub. 'Financial and digital services, fixed and Internet of Things offerings contributed R11.2-billion, or 17.8% of service revenue in South Africa.' That 'underlying strength,' however, isn't always where it seems. Guess who's driving growth? Despite the narrative of its evolution into a 'TechCo', the real growth engine – as Joosub alludes to – lies in Vodacom's financial services business. Normalised figures show a 17.6% surge in this segment, compared with a far more modest 7.6% growth on a reported basis. Financial services now account for 11.6% of consolidated service revenue, up from 10.5% the previous year. Geographically, Egypt delivered standout results, with normalised financial services revenue rocketing 80.1%. M-Pesa in international markets also played its part, growing 11.4% (normalised), although reported growth was comparatively flat at just 5.9%. Meanwhile, data traffic in South Africa rose by 36.4%, contributing to a 12% increase in prepaid data revenue. Cloud, hosting and security services in Vodacom Business were another highlight, climbing 35.6%. But despite such gains, these segments are still dwarfed by traditional prepaid mobile revenue. A convenient disparity? The reliance on normalised metrics isn't unique to Vodacom, but the spread is wild: 11.2% normalised service revenue growth vs a 0.1% reported decline. Yes, currency volatility across its African markets – especially Ethiopia, Mozambique and Egypt – distorts headline results. But the growing gulf between reported and normalised numbers invites scepticism, especially when the positive spin is reserved for growth areas aligned with Vodacom's strategic messaging. Notably, the company excludes forex losses, hyperinflation and M&A costs from its adjusted numbers – adjustments that rarely seem to cut both ways. Hard truths about handset financing That brings us neatly to the equipment revenue (read: mostly handsets sold on its platform) that grew 2.7% to R20.3-million. This is the rug that hides the stains of business: Vodacom is aggressively expanding handset financing, particularly for prepaid customers – an area traditionally left out of device subsidy schemes. The company struck a R3.75-billion financing 'arrangement' in 2024 to fund this expansion. Joosub's executive report confirms that the operator has 'significantly scaled up our prepaid handset financing initiatives', aiming to onboard the estimated 80 million non-smartphone users across Vodacom's footprint. What this means for you On paper, this sounds like financial inclusion. In practice, it may amount to a long-term revenue lock-in, or worse, a form of digital debt. Contracts now stretch up to 36 or even 48 months. Consumer rights groups have raised concerns about the risks of locking lower-income users into long-term obligations for low-end or refurbished devices that may not survive the term. The benefit for Vodacom? Longer revenue streams, better data usage (and thus digital services uptake), and improved customer retention, all without the capital burden of traditional subsidies. Comparison, for context Vodacom's pivot to handset financing mirrors a broader industry shift. MTN South Africa's latest results show it generated R9.4-million in device revenue for FY2024. The group recently partnered with PayJoy to offer alternative financing models for smartphones, also targeting the informal market. Cell C, is harder to discern because the Blue Label Group reports handsets, tablets and other devices through its subsidiary Comm Equipment Company (CEC). Group revenue in this category was R2.7 billion across its Africa distribution. What distinguishes Vodacom is the scale – and the speed – of its financing rollout. While MTN is experimenting and Cell C is catching up, Vodacom appears all-in, targeting both postpaid and prepaid markets with the same strategy. A telco by another name… Vodacom wants to be seen as a forward-facing digital enterprise – a techco, not a telco. And in many respects, it's getting there: 36.4% more data consumed, more cloud and security clients and nearly 18% normalised growth in financial services. But the bulk of revenue still comes from simcards and handsets. And the fastest-growing segment? Not 5G, not AI, but what could be described, depending on your view, as a digital microfinance operation riding on the back of basic connectivity. For consumers, the promise of affordable smartphones needs to be weighed against the risks of longer debt terms, higher total costs and potential credit blacklisting. For investors, Vodacom's true health lies somewhere between its reported and normalised figures – neither of which tells the full story alone. DM
Yahoo
20-05-2025
- Business
- Yahoo
Vodacom Group Ltd (VDMCY) Full Year 2025 Earnings Call Highlights: Strong Revenue Growth Amidst ...
Revenue: ZAR152 billion, up 1.1% on a reported basis; 11.2% growth on a normalized basis. Group EBITDA: ZAR55.5 billion, down 1.1%; 7.8% growth on a normalized basis. Net Profit: ZAR19.9 billion, up 3.3%; 13.6% growth on a normalized basis. Headline Earnings Per Share (HEPS): ZAR0.857, up 1.3%. Dividend: Final dividend of ZAR0.335 per share; total dividend for the year ZAR0.620 per share, up 5.1%. Financial Services Revenue: ZAR14 billion, up 7.6% in rands; 17.6% growth on a normalized basis. South Africa Service Revenue: ZAR63 billion, up 2.3%. Egypt Service Revenue: ZAR27.7 billion, contributing 23% to the group; 45.2% growth in local currency. International Business Service Revenue: ZAR30.6 billion, up 2.6%; 7.1% growth on a normalized basis. Safaricom Service Revenue: Increased 10.8%, with strong growth in Kenya and Ethiopia. Free Cash Flow: ZAR18.2 billion. Return on Capital Employed (ROCE): 23.5%, up 0.4 percentage points. Warning! GuruFocus has detected 10 Warning Signs with VDMCY. Release Date: May 19, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Vodacom Group Ltd (VDMCY) reported a strong finish to the year with revenue reaching ZAR152 billion, up 10.9% on a normalized basis. The company expanded its customer base to 211 million, reflecting growth across its geographic footprint. Vodacom's financial services business, including M-Pesa, continues to grow, contributing significantly to the group's revenue. The company has committed to net zero for Scope 1 and 2 greenhouse gas emissions by 2035, showcasing its dedication to sustainability. Vodacom's Vision 2030 strategy aims for double-digit service revenue and EBITDA growth, building on the success of Vision 2025. The devaluation of the Egyptian pound negatively impacted reported growth, with group EBITDA declining by 1.1%. International business EBITDA declined by 10.9% due to revenue pressures in Mozambique and one-off costs in the DRC. The MAZIV transaction was prohibited by the Competition Tribunal, affecting Vodacom's fiber expansion plans in South Africa. The company faced challenges in Mozambique due to repricing and post-election tensions, impacting financial performance. There was a material increase in credit loss associated with financial assets, particularly in the DRC, due to government payment delays. Q: Can you provide insights into the prepaid charges in South Africa, particularly regarding Airtime Advance and voice trends? A: Mohamed Shameel Aziz Joosub, CEO, explained that about 50% of prepaid recharges go through Airtime Advance. The voice revenue trend showed a slight decline, with a minus 8.5% in Q4 compared to a full-year decline of around 5%. This was attributed to summer promotions, and the company is not overly concerned about this trend. Q: What are the expectations for price increases in prepaid and postpaid services in FY2026, considering current inflation rates? A: Joosub stated that postpaid prices increased by about 6% in March, following a "more-for-more" strategy, offering more data with price hikes. For prepaid, price adjustments are more opportunistic, focusing on rate management rather than direct price increases. Q: How is Vodacom addressing the cost-saving initiatives in South Africa, and what is the status of the sharing agenda with MTN? A: Raisibe Morathi, CFO, highlighted the Fit for Growth program, which involves optimizing contracts, managing demand, and energy-related activities. The sharing agenda with MTN involves exploring non-competitive network parts to drive down costs and optimize CapEx. Q: Can you elaborate on the growth momentum and margin expectations for Egypt, especially after recent price hikes? A: Joosub noted that a 30% price hike in December will support growth into the next fiscal year. The margin in Egypt is strong at 45%, with a net profit margin of 25%. The structural price floor in Egypt aids in maintaining revenue growth. Q: What is Vodacom's strategy regarding satellite technology across Africa, and how might it impact backhaul costs? A: Joosub explained that satellite technology is viewed in three blocks: backhaul, direct-to-dish, and direct-to-mobile. Backhaul presents a clear opportunity for cost reduction as LEO satellites offer lower latency and cheaper options. The company is exploring partnerships and agreements with various satellite providers. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Time of India
19-05-2025
- Business
- Time of India
Vodacom pursuing joint fibre ventures in Africa broadband push
By Nqobile Dludla JOHANNESBURG: Vodacom Group is pursuing partnerships for joint fibre ventures as Africa's second largest mobile operator looks to accelerate the roll out of high-speed broadband coverage across its markets. With the voice market slowing in parts of the continent including South Africa, telecom companies such as Vodacom and rivals MTN and Airtel Africa have doubled down on high-speed internet, an area long dominated by fibre companies such as Maziv-owned Dark Fibre Africa and Vumatel in South Africa. Vodacom wants to merge with Maziv but the deal has been prohibited by South Africa's competition authorities. Asked what will happen if its appeal with the Competition Appeal Court fails, Vodacom Group CEO Shameel Joosub said on a call with journalists that since funding for the proposed deal is still in the bank, the operator has "opportunities" to look at where else it could invest the money. "We will pursue fibre joint ventures in all our markets," Joosub said, adding that Vodacom had already set up a new entity in Tanzania and was working on fibre in Mozambique. "We're looking at different opportunities and different share the same ambition of wanting to make sure that we can provide connectivity," he added. The ideal joint venture structure for Vodacom would be a 50-50 split with Vodacom not concerned about controlling any vehicle, Joosub said. Rolling out fibre organically is a slow and costly expansion option at a time when mobile operators need to make up ground on existing fibre networks. Homes and businesses connected by Vodacom reached 198,000 in the year ended March 31, while its own fibre passed almost 166,000 homes and businesses. Vodacom, majority-owned by UK-based Vodafone, has 211.3 million mobile network customers across eight African countries. It is also partnering with satellite providers, including Amazon's Project Kuiper. Joosub said Vodacom could also potentially partner with Elon Musk's Starlink as "satellite is a necessary part of being able to expand coverage to everyone".
IOL News
19-05-2025
- Business
- IOL News
Vodacom achieves five-year strategy targets and increases the 2025 dividend by 5. 1%
Vodacom hopes to grow its customer base to 260 million people using its network by 2030, this after reaching 211.3 million customers in its 2025 financial year. Image: Supplied Vodacom Group met five-year targets and lifted its full-year dividend 5.1% to 620 cents a share, even though it served 9.2 million fewer customers in the year to March 31. South Africa's second biggest mobile network operator has also upgraded its medium-term operational earnings growth targets. CEO Shameel Joosub said Monday normalised earnings before interest, tax, depreciation and amortisation increased 7.8% to R55.52 billion in the past year and that the five-year target for this metric had been adjusted to double-digit figures from high single-digit figures. 'As we draw the curtain on our Vision 2025 strategy, I am proud of the progress we made over five years to deliver on our targets. This was despite a challenging environment marked by a global health crisis, currency volatility, geopolitical tensions, inflation pressures and energy disruptions in South Africa,' Joosub said in a statement. He said they finished the second half strongly, despite currency volatility, which had since stabilised, particularly in Egypt. Group revenue increased 1.1% to R152.2bn, despite big foreign exchange headwinds. Group service revenue fell by 0.1% in rands, but increased 11.2% on a normalised basis, above the medium-term target. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Financial services revenue increased 17.6% on the same basis to R14bn, contributing 11.6% to group service revenue. The group now serves a combined 211.3 million customers and 87.7 million financial services customers, including Safaricom on a 100% basis. 'Over the five-year period, we significantly expanded geographic and product diversification resulting in the number of customers using our networks increasing from 115.5 million to 211.3 million, while financial services customers rose from 53.2 million to 87.7 million, including Safaricom, over the same period,' said Joosub. Headline earnings a share for the past year increased 1.3% to 857 cents, reflecting strong growth in the second half. Operating profit was up 10.9% to R35.79 billion. 'We now seek to ensure we deliver against our Vision 2030 ambitions, which include growing our customer base to 260 million and financial services customer base to 120 million,' he said. Group service revenue from beyond mobile was targeted to increase to 30% from 21% currently. Group service revenue and EBITDA targets were upgraded from high single-digit to double-digit growth. He said the performance in South Africa over the past year had been resilient, and there was outstanding, continued growth in Egypt and Tanzania. The businesses in Mozambique and DRC were impacted by post-election tensions and conflict, but with momentum behind peace efforts in both countries, the group was hopeful of improved prospects. The South African business saw service revenue growth of 2.3%, led by a recovery in the prepaid segment, sustained data traffic growth of over 36.4%, and the increasing contribution of beyond mobile services. 'These services, encompassing financial and digital services, fixed and IoT, contributed R11.2bn, or 17.8% of South Africa's service revenue,' he said. The International business spanning DRC, Lesotho, Mozambique and Tanzania achieved 7.1% normalised service revenue growth. Tanzania saw service revenue growth of 20.5% and EBITDA increased 25.2% in shillings. Lesotho and DRC grew service revenue by 10.4% and 8.2% respectively, in local currency. M-Pesa, Africa's largest mobile money platform, processed over $450.8bn in transaction value, reflecting an 18.3% increase. In Ethiopia, a 103.2% increase in customer base to 8.8 million was driven by growing demand for connectivity and a growing commercial trajectory. Service revenue in local currency increased 238.9%. 'As the second most populous country in Africa, Ethiopia remains integral to our long-term growth ambitions, and we are encouraged by the market's response to our entry and the regulatory strides being made,' said Joosub. Egypt delivered service revenue of R27.7bn, contributing 23% to the group. Service revenue for the year was up 45.2%, accelerating to 47.7% in the fourth quarter, supported by a strong commercial campaign and price adjustments across mobile and fixed services in December. The group has lodged an appeal at the Competition Tribunal following a decision to prohibit Vodacom's proposed acquisition of a stake in Maziv, the parent of Vumatel and Dark Fibre Africa. Visit:
IOL News
19-05-2025
- Business
- IOL News
Vodacom's subscriber growth nearly doubles despite challenges in Mozambique and DRC
Over the past five years, Vodacom has invested in its infrastructure and products and expects to spend another R20 billion at least over the coming five years. Image: IOL/Independent Newspapers Vodacom, South Africa's largest mobile network operator, has almost doubled its subscriber base over the past five years as it reaches the end of its Vision 2025 plan. However, it is having a difficult time due to ongoing armed conflict in Mozambique and the Democratic Republic of Congo. The network operator, which released its results for the year to end-March on Monday, said its customers had grown from 115.5 million in 2020 to 211.3 million now, while financial services customers rose from 53.2 million to 87.7 million, including its Safaricom unit. 'We will not be resting on our laurels and now seek to ensure we deliver against our Vision 2030 ambitions, which include growing our customer base to 260m and financial services customer base to 120m. While cementing our leadership in all forms of connectivity, we expect our Group service revenue contribution from beyond mobile to increase to 30% from 21% today,' said Shameel Joosub, Vodacom Group CEO. Over the past five years, Vodacom has invested in its infrastructure and products and expects to spend another R20 billion at least over the coming five years. This, Joosub, said, reinforces 'commitment to connectivity, digital inclusion, and economic empowerment'. Joosub noted that its operations in Egypt, Tanzania and South Africa benefitted from market stability. However, 'our businesses in Mozambique and the Democratic Republic of Congo have been impacted by post-election tensions and conflict in eastern DRC respectively. With momentum behind peace efforts in both countries, we are hopeful of improved prospects into financial year 2026.' Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Next Stay Close ✕ Towards the end of last year, there was an outbreak of violence in Mozambique over concerns about fraud in the general elections that resulted in Frelimo keeping its power, which resulted in the Lebombo border between South Africa and Mozambique closing. In the Democratic Republic of Congo, the March 23 Movement, a rebel group that has been active in eastern DRC, caused armed conflicts with Congolese forces and a UN mission. 'While we remain hopeful of a recovery in Mozambique and sustained resolution in DRC, we are actively supporting our people and communities in the affected regions, including through our Foundation initiatives,' said Joosub. Vodacom's Foundation is a corporate social investment programme that focuses on education, gender empowerment, and community development, using mobile technology to drive social change. This company said it had also raised its earnings before interest, taxes, depreciation, and amortisation – profit from core business operations that is a key figure for analysts – target to double digit figures. For the year under review, this metric declined 1.1% to R55.5bn but grew 7.8% on a normalised basis. IOL
