Vodacom Group Ltd

Vodacom Group is the largest telecommunications and mobile financial services operator on the African continent by consolidated customer base and, since 30 June 2026, the controlling shareholder of Safaricom Plc. Majority-owned (65.1%) by Vodafone Group Plc, Vodacom operates controlled mobile networks in South Africa, Egypt, Tanzania, the Democratic Republic of Congo, Mozambique and Lesotho, and — following consolidation — Kenya and Ethiopia. At 31 March 2026 the Group served 237.3 million customers and 103.0 million financial services customers across eight markets, with networks covering 595.8 million people. Its differentiating asset is not connectivity alone but the largest mobile-money franchise in Africa: M-Pesa, Vodafone Cash and VodaPay together processed US$547.9 billion of transaction value in the twelve months to June 2026. The investment case rests on a mature, cash-generative South African business funding high-growth exposure to Egypt, East Africa and financial services, under an explicit Vision 2030 revenue ambition of more than R300 billion.

The company's own description

In its FY2026 investor materials Vodacom describes itself as "a leading and purpose-led African connectivity, digital and financial services company" whose purpose is "to connect for a better future." Management frames the business around three Vision 2030 strategic imperatives: differentiate with customer experience; innovate for growth; and invest in strategic enablers of growth and efficiency. The three purpose pillars are empowering people, protecting the planet and maintaining trust. Management has explicitly recast the corporate identity away from "telco" toward "TechCo," a transition first articulated under the Vision 2025 strategy and carried into Vision 2030.

Independent characterisation

Vodacom is best understood as three structurally distinct businesses stapled together by a common brand licence, a shared technology stack and a common capital allocator.

First, a mature South African mobile incumbent. South Africa generated R92.6 billion of revenue and R64.4 billion of service revenue in FY2026 — 55% and 48% of group totals respectively — at a 35.6% EBITDA margin. Growth here is low single digit (2.1% service revenue in FY2026, 2.0% in Q1 FY2027). This is the cash engine, not the growth engine. It funds group dividends and carries the balance sheet.

Second, a high-growth emerging-market connectivity portfolio. Egypt (36.2% local-currency service revenue growth in FY2026) and the International segment (14.4% normalised) supply the growth. Egypt alone contributed 29.7% of group EBITDA in FY2026 on 27.0% of service revenue — a higher-margin, higher-growth asset than the home market, which is unusual for an emerging-market acquisition and validates the December 2022 purchase.

Third, a pan-African fintech. Financial services revenue of R16.8 billion (FY2026, +19.6%) contributed 12.6% of consolidated service revenue. With Safaricom consolidated from 1 July 2026, management expects that contribution to rise above 22% — a step-change that makes Vodacom, on a consolidated basis, one of the largest financial-services-by-revenue franchises listed on the JSE outside the banks.

Revenue model and mix

Vodacom's revenue is overwhelmingly recurring service revenue rather than product sales or licensing. In FY2026:

Within service revenue, the FY2026 split by product was: mobile prepaid R78,298m; mobile contract R34,146m; fixed service R8,919m; other service revenue R7,235m; mobile interconnect R4,963m. Prepaid dominance (58.6% of service revenue) is the defining structural feature of the African model and explains the sensitivity of the business to consumer disposable income and to prepaid recharge behaviour.

Subscription vs. transactional. Contract (post-paid) revenue is genuinely subscription-based; prepaid is transactional and repriced continuously through "nano-pricing" personalisation (the Just4You platform). Financial services revenue is fee- and commission-based, plus interest income on lending and float. Equipment revenue is device sales, largely pass-through at low margin, and is deliberately grown to drive smartphone penetration (68.6% at FY2026) rather than for its own economics.

Value chain position and customer types

Vodacom sits at the retail and wholesale connectivity layer, increasingly integrating downstream into financial services, digital services and enterprise IT, and — through the Maziv associate stake — upstream into passive fibre infrastructure. It is a buyer from network equipment vendors (Nokia, Ericsson, Huawei), handset OEMs and tower companies, and a seller to:

• Consumers (the overwhelming majority): prepaid and contract mobile, mobile data, fixed broadband, mobile money, insurance and lending.
• Small and medium enterprises and large corporates via Vodacom Business: connectivity, cloud, hosting and security (CHS revenue +27.1% in FY2026 in South Africa), IoT (9.9 million connections in South Africa at June 2026), managed services and financial solutions. Vodacom Business Africa markets to enterprises across 32 countries.
• Governments and public sector: national relay services, health, education and utility solutions (the RT29 tender win in South Africa drove 17.5% IoT revenue growth in Q1 FY2027).
• Wholesale carriers and ISPs: carrier services, national roaming, transit and bitstream.
• Merchants: 716,000 M-Pesa merchants across the International business at June 2026; over 11,200 in South Africa.

End-markets served

Eight operating markets: South Africa, Egypt, Tanzania, DRC, Mozambique, Lesotho, Kenya and Ethiopia. Aggregate population coverage 595.8 million (FY2026). The demographic thesis is straightforward: young populations, low fixed-line penetration, low banking penetration and rising smartphone affordability. Management's own framing is that "the challenge is increasingly one of device access rather than coverage."

Vision 2030 — the stated strategy

Vision 2030, unveiled at an investor event in February 2025 and now one year into execution, replaces Vision 2025. Management's own framing, from the FY2026 results booklet:

"Vision 2030 is designed to accelerate Vodacom's growth, deepen our positive impact across Africa, and deliver sustainable value for our shareholders."

Three strategic imperatives:

1. Differentiate with customer experience. "We aim to earn customer loyalty by delivering meaningful value propositions and a simplified, exceptional experience across every touchpoint." Targets: NPS leadership in all markets and a customer base above 275 million by FY2030 (upgraded from 260 million).
2. Innovate for growth. "Drive market leadership in connectivity and scale beyond mobile." Targets: beyond-mobile contribution above 32% of service revenue (upgraded from approximately 30%); 130 million financial services customers (upgraded from 120 million); smartphone penetration above 75%.
3. Invest in strategic enablers for growth and efficiency. "Investing in our people, next-generation skills, and a diverse, future-ready workforce"; network modernisation; AI-powered operations; cyber security. Target: 50% female executives by FY2030 (excluding Ethiopia).

The residual Vision 2025 framing — the "System of Advantage" multi-product strategy — remains the operating architecture beneath Vision 2030.

Vision 2030 KPI scoreboard

Medium-term financial targets

Targets are stated on average over three years, on a normalised basis, at prevailing economic conditions, excluding spectrum purchases, exceptional items and further M&A, and including Safaricom on a pro-forma basis for FY2026 and Q1 FY2027. They do not account for potential hyperinflation adjustments.

Strategic initiatives announced in the last 24 months

ESG and sustainability commitments

• Net zero for scope 1 and 2 emissions by 2035, with the ambition submitted for Science Based Targets initiative verification.
• 79% reduction in scope 1 and 2 market-based emissions from the FY2020 baseline (FY2026).
• 100% of grid electricity purchased matched with renewable sources via PPAs and renewable energy certificates (FY2026).
• All operating companies retained ISO 50001 energy management certification and completed surveillance audits in FY2026.
• Energy intensity reduced 20% to 0.27 MWh per terabyte (FY2025: 0.34).
• Sustainability-linked financing: first South African telecommunications ESG loan in 2019; R2.0bn sustainability-linked loan originated in FY2024; multiple sustainability-linked term facilities tied to gender diversity and financial inclusion KPIs with a margin adjustment mechanism.
• Gender and inclusion programmes: m-mama (maternal emergency transport), Code Like a Girl, Je Suis Cap (DRC — training women with disabilities as mobile money agents), Female Leadership programme, inclusive procurement, and a programme to train one million women in rural Egypt to run digital businesses.

Cost programmes

Vodacom does not publish a named, quantified group cost-transformation programme with a rand target — unlike MTN's Expense Efficiency Programme. Cost management is described qualitatively: "cost containment efforts" in South Africa, "well managed other operating expenditure" in Egypt, and infrastructure sharing and efficiency programmes across markets. A quantified group cost-savings target is not publicly disclosed. International business expenses actually declined 0.2% in FY2026 — below inflation — which is the strongest evidence of cost discipline in the disclosure.

South Africa — consumer mobile

• Vodacom prepaid. Pay-as-you-go voice, SMS and data on the Vodacom-branded network. 39.1 million prepaid customers at 31 March 2026 (38.8 million at 30 June 2026). Prepaid ARPU R58/month (FY2026), up 7.4%. Prepaid mobile customer revenue R26,728m in FY2026 (-2.1%), of which prepaid mobile data revenue R14,916m (+5.0%). Voice fell below 30% of prepaid service revenue in Q4 FY2026 — a structural crossover. Pricing model: airtime denominations, bundles and personalised "nano" offers.
• Just4You. Big-data personalisation engine offering individually priced voice and data bundles. Central to prepaid revenue management. Not separately monetised.
• Vodacom contract / Red and Sky tariff families. Post-paid subscriptions with device subsidy or device financing, typically 24- or 36-month terms. 7.0 million contract customers (Q1 FY2027), contract ARPU R318/month. Mobile contract customer revenue R25,237m in FY2026 (+3.5%), assisted by an annual price adjustment implemented in February 2026 (earlier than usual).
• Airtime Advance. Micro-credit product advancing airtime to prepaid customers, historically representing 45.7% of total prepaid recharges (FY2024 disclosure). A core digital-inclusion and lending product.
• Device financing / handset affordability programme. Prepaid handset financing rolled out group-wide; 18.8 million smartphones added across the group in FY2026; group smartphone penetration 68.6%.

South Africa — fixed and converged

• Vodacom Fibre (FTTH/FTTB). Retail fibre over own and third-party (now largely Maziv/Vumatel/DFA) networks. Homes and businesses connected reached 233,000 at FY2026 and 247,000 at June 2026. Fixed service revenue R5,464m in FY2026, +7.9% (+8.1% excluding low-margin wholesale transit).
• Fixed-LTE / 5G fixed wireless access. Router-based home broadband over the 4G/5G network — the principal competitive response to fibre in lower-density areas.
• Bitstream / wholesale ISP. Vodacom acts as ISP to fibre wholesalers.
• Carrier services. International voice and data transit, roaming and wholesale capacity, marketed through Vodacom Carrier Services.

South Africa — financial and digital services

• VodaPay. Super-app launched October 2021 with Alipay technology. Aggregates mini-apps, QR and P2P payments, e-commerce, entertainment, lending marketplace and account management. Reached 10.4 million downloads and 5.8 million registered users by FY2024 (latest granular disclosure); described in FY2026 as "an important channel for our seasonal campaign." Registered-user disclosure has since been discontinued.
• Vodacom insurance (Vodacom Life / device, funeral and life cover). 3.0 million policies at FY2026, 3.1 million at June 2026 (+11.1%). The primary driver of South African financial services revenue growth of 8.1% in FY2026.
• Vodacom lending and merchant services. Lending marketplace and merchant acquiring; South African merchant base over 11,200 at FY2026.
• Digital services. Content, gaming, music and value-added services; revenue R1.6bn in FY2024 (+13.6%) — the most recent standalone disclosure.
• Total South Africa financial services revenue: R3,718m in FY2026 (+8.1%).

Vodacom Business (enterprise, South Africa and Africa)

• Connectivity. Fixed and mobile enterprise connectivity, MPLS, SD-WAN, dedicated internet. Vodacom Business service revenue R17,893m in FY2026 (+6.2%); R4.4bn in Q1 FY2027 (+3.3%).
• Cloud, hosting and security (CHS). Managed cloud, co-location, hosting and cybersecurity services. Revenue +27.1% in FY2026; +8.9% in Q1 FY2027. The fastest-growing enterprise line for three consecutive years (+38.5% FY2024).
• Internet of Things (IoT). 9.267 million IoT connections in South Africa at 31 March 2026, 9.902 million at 30 June 2026 (+8.1% YoY). Delivered through IoT.nxt (10T Holdings, 65%-owned since 2022) and the Vodafone Global IoT platform. Q1 FY2027 IoT revenue +17.5%, boosted by South African government's RT29 utilities-efficiency tender.
• SMART collaboration. Unified communications, Microsoft-based collaboration and productivity bundles.
• Vodacom Business Africa (VBA). Enterprise managed services marketed to multinationals across 32 countries, built on the 2008 Gateway Communications acquisition.
• Mezzanine. Wholly-owned digital solutions subsidiary building "Tech for Good" platforms: stock visibility in health, mVacciNation, connected farmer, subsidy distribution to smallholder farmers, digital education.

Egypt (Vodafone Egypt Telecommunications S.A.E., 55%)

• Vodafone Egypt mobile prepaid and contract. 53.8 million 90-day active customers at June 2026 (52.5 million at March 2026); 55.2 million on a closing basis at FY2026. Prepaid ARPU EGP161/month, contract ARPU EGP267/month (Q1 FY2027).
• Mobile data / 4G and 5G. 35.7 million data customers (June 2026). 5G launched June 2025. Data traffic +36.1% in Q1 FY2027. Spectrum position augmented by 2x10 MHz at 1800 MHz secured February 2026 for c. US$350m.
• Vodafone Cash. Egypt's mobile wallet. 15.7 million users at June 2026 (+30.9%). Financial services revenue R3,147m in FY2026 (+41.7% reported, +48.2% local currency); +73.0% local currency in Q1 FY2027. Contribution to Egypt service revenue rose from 7.6% to 9.8% year on year.
• Fixed and IoT (Egypt). Fixed service revenue R2,364m in FY2026 (+29.1%).
• One-app strategy. Consolidation of telecommunications and wallet apps into a single super-app — the template management intends to replicate across the group.

International business

• Vodacom Tanzania Plc (separately listed on the Dar es Salaam Stock Exchange). 28.6 million customers at June 2026 (+21.6%). Service revenue R12,534m in FY2026 (+18.7% reported, +21.8% normalised). M-Pesa Tanzania including M-Koba group savings (grew more than 80% in FY2026; 60% of deposits by women members) and Songesha lending. Launched Africa's first mobile-money tap-to-pay solution in Q1 FY2027 for over 22 million M-Pesa customers. Radio access network modernisation completed; depreciation increased R742m on the change in useful-life estimate.
• Vodacom Congo (RDC) S.A. 26.4 million customers (June 2026). Service revenue R13,890m in FY2026 (+8.1% reported, +13.7% normalised). M-Pesa DRC; Je Suis Cap programme training women with disabilities as mobile money agents.
• VM S.A. (Mozambique). 11.6 million customers. Service revenue R5,428m in FY2026 (-1.9% reported, +3.3% normalised) as the market recovered from price transformation. Awarded a 5G licence and 210 MHz of spectrum for US$55m in Q1 FY2027.
• Vodacom Lesotho. 1.7 million customers; service revenue R1,547m (+13.8%). Highest ARPU in the International segment at R75/month.
• M-Pesa (International). R9,901m revenue in FY2026 (+18.4% reported, +22.8% normalised), 29.4% of International service revenue. 29.3 million active M-Pesa customers. "Beyond core" services (lending, savings, merchant, insurance) reached 46.4% of M-Pesa revenue in FY2026 and 47.3% in Q1 FY2027. Loans facilitated R26.7bn in FY2026 (+13.0%). Agent network 527,000 (+21.4%); merchant base 716,000 (+19.3%).
• M-Pesa Africa. Joint venture with Vodafone/Safaricom that owns and develops the M-Pesa platform and product roadmap across markets.

Safaricom (consolidated from 1 July 2026)

• Safaricom Kenya mobile. 57.9 million customers (FY2026, +20.1%). Kenya service revenue KES 400.8bn (+10.0%).
• M-Pesa Kenya. Revenue +13.4% in FY2026; 46.4 billion transactions (+25.1%); 3.2 million large and micro merchants (+71.9%); wealth assets under management KES 21.0bn (Mali and related products). Safaricom financial services revenue R24,495m on a 100% basis in FY2026.
• Safaricom fixed / FTTH. 407,080 FTTH customers (+35.0%); homes passed above 800,000. Fixed and wholesale transit revenue KES 19.1bn (+11.7%).
• Safaricom Telecommunications Ethiopia. 13.6 million customers at FY2026 (+54.2%), 14.7 million at June 2026; 3,504 sites. Local-currency service revenue +130.9%. EBITDA losses reduced 54.4%. Targeting EBITDA breakeven in FY2027 and a medium-term customer base of 15–20 million.

Fibre infrastructure (associate, from 1 December 2025)

• Maziv (30% held). Holding company for Vumatel (South Africa's largest FTTH network) and Dark Fibre Africa (fibre-to-the-tower and fibre-to-the-business). 2.3 million homes passed (unaudited management estimate, FY2026); c. 40% market share of homes passed. Expected FY2026 revenue R7.6bn and EBITDA R5.2bn. Held a 49.96% non-controlling stake in Herotel at 31 March 2026, control of which was approved in December 2025 and the licence transfer approved by ICASA on 14 May 2026. Vodacom paid a further R0.8bn into Maziv in Q1 FY2027 in connection with Herotel. Vodacom retains an option to increase to a maximum 34.95%.

Named flagship offerings summary

Pricing model disclosure. Vodacom does not publish tariff-level pricing in its financial reporting. Where pricing is disclosed it is by inference: annual contract price adjustments (February 2026 in South Africa), prepaid bundle repricing, and M-Pesa commission structures. Detailed unit pricing is not publicly disclosed in filings.

All figures ZAR millions unless stated. Source: Vodacom Group reviewed annual results booklets FY2022, FY2024, FY2026.

Income statement — chartable

Per-share data — chartable

Margins and growth — chartable (%)

Compound annual growth rates, FY2022–FY2026 (analyst calculation): revenue 13.0%; service revenue 13.7%; EBITDA 11.9%; HEPS 1.0%; dividend per share -3.6%.

Balance sheet — chartable (ZAR M)

Goodwill and intangibles. Vodacom does not separately disclose goodwill within the intangible asset line in its results booklets. Total intangible assets stood at R33,410m at FY2026. Goodwill arising on the Maziv acquisition was R6,282m (total consideration R12,642m less the group's R6,360m share of Maziv's net identifiable assets). The standalone goodwill balance for the group as a whole is not publicly disclosed in the reviewed results; it is contained in the full annual financial statements.

Cash flow — chartable (ZAR M)

Buybacks. Vodacom does not operate a capital-return share repurchase programme. The amounts above relate exclusively to on-market purchases for the forfeitable share plan: 3,936,062 shares at an average R136.92 in FY2026 (FY2025: 5,511,544 at R94.72). Repurchases have never exceeded 1% of issued share capital.

Ratios — chartable

ROE and ROA are analyst calculations from disclosed figures. ROCE is as disclosed by the company on its own definition (adjusted statutory operating profit excluding capital items divided by average total assets less current liabilities); zeros indicate the metric was not disclosed on this basis for those years.

Cash conversion cycle. Vodacom does not disclose the components required to compute a conventional cash conversion cycle, and the metric is of limited relevance to a service business where inventory turns 34 times a year. Inventory was R2,112m at FY2026 against direct expenses of R64,262m, implying roughly 12 days of inventory. Trade and other receivables of R29,986m against revenue of R167,652m implies roughly 65 days of receivables; trade and other payables of R46,181m against direct plus other operating expenses implies roughly 191 days. The resulting negative cycle is normal for the sector. Flagged as an analyst calculation, not a company disclosure.

Commentary on trends, inflections and drivers

Revenue. The five-year record splits cleanly into two regimes. FY2023–FY2024 revenue growth of 16.0% and 26.4% is almost entirely the Egypt acquisition; excluding Egypt, FY2024 group service revenue grew 5.9% reported and 3.4% normalised. FY2025 reported growth collapsed to 1.1% on revenue and -0.1% on service revenue — not because the business stalled but because the Egyptian pound devalued sharply in March 2024 and again through FY2025, and the Ethiopian birr devalued in H1 FY2025. Normalised service revenue growth in FY2025 was 11.2%. FY2026 marks the point at which reported and normalised growth reconverge: 10.6% and 12.9% respectively. The key analytical discipline with Vodacom is to read normalised growth for operational performance and reported growth for shareholder outcomes.

Margin. Group EBITDA margin bottomed at 36.5% in FY2025 and recovered 90 basis points to 37.4% in FY2026. The mix effect is now working in the company's favour: Egypt at a 45.0% margin and growing at 42.2% normalised is displacing South Africa at 35.6% and shrinking. This is the single most important margin driver over the forecast horizon and is likely to be reinforced by Safaricom Kenya's 56.7% Kenyan EBITDA margin from FY2027.

Earnings. The most striking feature of the five-year record is the divergence between top line and per-share earnings. Revenue compounded at 13.0% while HEPS compounded at 1.0%. Three forces explain the gap: (i) the 242 million shares issued to fund Egypt diluted the share count by roughly 14% between FY2022 and FY2024; (ii) net finance charges nearly doubled from R3,673m to R7,201m between FY2022 and FY2024 as South African rates normalised and acquisition debt was drawn; (iii) Ethiopia start-up losses and foreign-exchange translation losses consumed an estimated 77 cents of FY2024 HEPS on management's own bridge (56cps FX, 21cps Ethiopia). FY2026 is the inflection: HEPS +22.9%, driven by Egypt net income growth of 56.2% in local currency, Safaricom net income +37.0%, International operating profit +67.2%, a 290 basis point reduction in the effective tax rate, and a modest decline in net finance charges as the average cost of debt fell from 9.7% to 8.7%.

Balance sheet. Net debt rose 20.9% to R62,979m in FY2026 on the Maziv acquisition (R7,930m cash) and Egyptian spectrum, lifting leverage from 0.9x to 1.0x. Non-current borrowings jumped R20,056m as the group termed out its funding, including R7,928m of preference shares issued to Standard Bank, ABSA, Depfin, Rapvest and Rand Merchant Bank specifically for Maziv, and syndicated tranches maturing 2028, 2030 and 2032. Vodafone Investments Luxembourg remains a material related-party lender (R30,184m of borrowings including accrued finance cost at FY2026, down from R32,269m). Following the Safaricom consolidation, management has guided that leverage will trend towards its 1.5x internal threshold, with incremental transaction-related debt comprising R35bn of acquisition funding, R19bn of Safaricom net debt, a R5bn advance to the Government of Kenya and a R2bn Ethiopia put option.

Cash flow. Operating free cash flow has compounded steadily from R22,693m to R33,034m (9.9% CAGR). Free cash flow was flat between FY2023 and FY2025 at R18.2–18.5bn because finance costs paid rose from R3,918m to R5,911m; it then jumped 20.1% to R21,842m in FY2026 on lower rates and higher net dividends received. Working capital, which was a R1,440m inflow in FY2025, contributed only R514m in FY2026 after an H1 outflow that "substantially reversed" in H2 — a phasing item worth monitoring but not a structural concern.

Dividend. The dividend narrative is a two-step reset. The FY2023 policy change (from at least 90% of adjusted headline earnings excluding Safaricom, plus flow-through of Safaricom dividends, to at least 75% of group headline earnings) cut declared DPS from 850cps to 670cps. FY2026 DPS of 735cps has still not recovered the FY2022 level. The July 2026 announcement of a further reduction to at least 65% of headline earnings is the second step, justified by deleveraging and reinvestment needs post-Safaricom, with management guiding that absolute DPS will nonetheless grow in FY2027 given the enlarged earnings base.

Management guidance

Targets exclude spectrum purchases, exceptional items, further M&A and potential hyperinflation adjustments, and include Safaricom on a pro-forma basis for FY2026 and Q1 FY2027.

Consensus expectations

Consensus is Hold/Neutral with ten covering analysts, a mean target of R162.15 (StockAnalysis, July 2026) and forecast three-year revenue and EPS growth of approximately 15% per annum each. The target range of R125–R215 is exceptionally wide. Note that most published consensus figures pre-date the Safaricom consolidation and the July 2026 guidance changes.

Bull case

1. The Safaricom consolidation is materially accretive and under-modelled. Safaricom on a 100% basis generated R57.0bn of revenue and R29.4bn of EBITDA at a 51.5% margin in FY2026, with net income up 37.0% in shillings and Kenyan EBITDA margins expanding 270 basis points to 56.7%. Consolidating a business with a 51.5% margin into a group running at 37.4% is mathematically transformative for group margin, and it arrives alongside management's upgrade of EBITDA and operating free cash flow growth targets to early-teens. Consensus targets compiled before 30 June 2026 cannot reflect this.

2. Egypt has not finished compounding, and the runway is now visible. Egyptian service revenue grew 36.2% in FY2026 and re-accelerated to 32.8% in Q1 FY2027 after a Q4 moderation, with 25.2% ARPU growth, 36.1% data traffic growth and financial services revenue up 73.0%. The February 2026 spectrum programme provides regulatory visibility through FY2032, including a second phase releasing 3500 MHz for 5G. Egypt's EBITDA margin has expanded from 34.6% at consolidation to 45.0% and the Egyptian pound has recovered below USD:EGP 50.

3. The two structural overhangs are gone and the balance sheet works. The Makate exposure — which on the SCA majority judgment implied a minimum of R29bn against a market capitalisation then around R230bn — was settled for a sum implied at R353m–R748m. Maziv was approved after four years. Meanwhile ROCE expanded 400 basis points to 27.5%, free cash flow grew 20.1% to R21.8bn, and the average cost of debt fell from 9.7% to 8.7% into a South African rate-cutting cycle and a sovereign upgrade. On a c. 11% free cash flow yield with a 4.5% dividend yield and 15% forecast earnings growth, the equity is not demanding.

Bear case

1. The core business is shrinking in real terms and the market is not being won back. South Africa produced 2.1% service revenue growth and -1.7% EBITDA growth in FY2026 against South African inflation, with margin down 140 basis points to 35.6% and 370 basis points over five years. Data customers fell 4.3% in FY2026 and 5.7% in Q1 FY2027. Telkom, a structurally lower-cost competitor, has outgrown Vodacom in mobile service revenue for fourteen consecutive quarters (6.8% versus 2.1% in FY2026). Roughly 53% of group EBITDA is currently generated by a business in real decline.

2. The five-year shareholder record contradicts the operational narrative. Revenue compounded at 13.0% between FY2022 and FY2026; HEPS compounded at 1.0% and dividend per share at -3.6%. The gap was consumed by 242 million shares issued for Egypt, net finance charges that nearly doubled, Ethiopia losses and currency translation. The Safaricom transaction repeats the pattern's mechanics: R35bn of new debt, roughly R2bn a year of incremental post-tax PPA amortisation, and a large new non-controlling interest — against a background where NCI already took R6,090m, or 22.8%, of FY2026 net profit. The dividend policy was simultaneously cut for the second time in four years, from 75% to 65% of headline earnings.

3. The residual Kenyan legal risk sits on top of an already-executed US$2.1bn transaction. The conservatory order was lifted on 26 June 2026 and the block trade executed on 30 June 2026 — but the High Court of Kenya heard a petition against the transaction on 29 June 2026, the day before closing, with a ruling expected before end-August 2026 and no outcome disclosed as at the date of this dossier. A transaction of this scale, involving the sale of a strategic national asset by a government to a foreign-controlled buyer, completed while a petition was pending, is not a risk a minority shareholder can hedge. Layered on top are Egypt's 29.7% EBITDA concentration in a currency with a history of step devaluations, the Tanzanian mobile-money levy precedent, and undisclosed tax disputes across eight jurisdictions.

Catalysts and monitorables for the next twelve months

Analyst verdict

Vodacom in September 2026 is a materially different company from the one that entered FY2026, and the market has not fully repriced it. Three things happened within thirteen months that each individually would have justified a re-rating: the Competition Appeal Court unlocked the fibre strategy after four years of obstruction; the Makate settlement removed a liability that on the Supreme Court of Appeal's majority reasoning ran to a minimum of R29 billion; and the group took control of Safaricom, the highest-margin large telecommunications asset in sub-Saharan Africa. FY2026 itself was the best operating year since the Egypt acquisition — normalised service revenue growth of 12.9%, normalised EBITDA growth of 14.2%, headline earnings per share up 22.9%, free cash flow up 20.1% and return on capital employed up four percentage points to 27.5%.

The bear case is nonetheless serious and is not a matter of sentiment. Over five years, revenue compounded at 13.0% and headline earnings per share at 1.0%. Dividends per share are lower than in FY2022 and the payout policy has now been cut twice. South Africa — still more than half of group EBITDA — is in real decline and is losing prepaid share to a structurally cheaper competitor. Every large transaction in this company's recent history has been funded in a way that transfers value from existing per-share earnings to future consolidated scale: shares for Egypt, R35 billion of debt plus a large new minority for Safaricom. The pattern may finally be inflecting, but investors have been told that before.

The honest resolution is that Vodacom has become a call option on execution outside South Africa, financed by a home market that must merely stop deteriorating. Egypt at a 45% margin growing above 30%, Safaricom Kenya at a 56.7% margin, Ethiopia approaching breakeven with 14.7 million customers, and a fintech franchise processing US$548 billion annually are assets that few emerging-market operators can match. Against them sit a 22% free float, a controlling shareholder that is also the largest lender and the brand licensor, and an unresolved Kenyan court petition sitting on top of a completed US$2.1 billion acquisition.

At roughly 15 times headline earnings, 6 times EV/EBITDA, an 11% free cash flow yield and a 4.5% dividend yield, the valuation does not demand that everything goes right. It demands only that Egypt keeps compounding, Ethiopia reaches breakeven, and South Africa stops falling. The consensus Hold is fair. The distribution of outcomes, however, is unusually asymmetric, and the near-term determinant is not operational at all — it is a Kenyan judgment whose status any reader of this dossier should verify before acting.

END OF DOSSIER

Prepared from publicly available information as at 6 September 2026. All figures are sourced to company filings, results announcements, regulatory documents or named third-party providers. Figures identified as "not publicly disclosed" have not been estimated. Where sources conflict — notably on market capitalisation, share count treatment, the Makate settlement quantum, employee headcount and 52-week share price performance — both figures are presented with the discrepancy noted. This document is an information compilation, not investment advice, and its author is not a licensed financial adviser.

Guidance revisions in the period:* two upward (medium-term EBITDA and operating free cash flow from double-digit to early-teens, July 2026; Vision 2030 revenue from >R200bn to >R300bn and beyond-mobile contribution from c.30% to >32%, July 2026) and one downward (dividend payout policy from at least 75% to at least 65% of headline earnings, July 2026). Layoffs and restructuring:* no group-wide redundancy programme was announced in the period. The Tanzanian radio access network swap-out and the Maziv fibre asset contribution are asset restructurings rather than workforce actions.