Mobile operator Vodacom’s share price has increased by almost a quarter since the start of the year as confidence in the group’s strategy grows.
SA telecom companies have done well in 2025, with Vodacom as the standout performer. Since January, the share is up 23.31% compared to MTN (up 16.88%) and Telkom (up 6.02%) over the same period.
The complexion of Vodacom’s investment case has certainly changed in recent years, driven by growth in its Egypt operation.
Traditionally, the shares were considered to be a safe bet for investors in the sector. But Vodacom — valued at about R260bn — has endured some of the same volatility as rival MTN since taking over Vodafone’s Egypt operations in 2023. The Egyptian pound has lost about 40% against the dollar between 2023 and 2024, taking a toll on Vodacom’s earnings.
The Egyptian operation has changed how market players view and analyse the group, as well as the factors associated with its success, given its size in the portfolio. Vodacom has direct mobile network operations in seven countries: SA, Tanzania, the Democratic Republic of Congo, Mozambique, Lesotho, Egypt and Kenya, through Safaricom.
Just as MTN’s fortunes are often shaped by Nigeria, its largest business that accounts for a third of earnings, Vodacom’s main business has traditionally been in SA.
In 2022, the last financial year the group operated without Egypt, the SA unit accounted for 73.2% of service revenue and 35% of its then 129.6-million customers. Now Egypt accounts for 23.5% (48.3-million) of the group’s 205.6-million customers, just shy of SA’s 23.9% (49.2-million), as of December 2024.
Unsurprisingly, Egypt was a big topic during the group’s latest quarterly earnings call with investors. During that session, Vodacom group head Shameel Joosub was positive as he highlighted a stabilising of the Egyptian currency.
“Egypt delivered another excellent performance. Service revenue in local currency was up 44.3%, despite lapping a strong comparative period. The result was broad-based, with strong growth in consumer mobile and fixed, business and Vodafone Cash. In December, we received an additional 30% price up across mobile and fixed products.”
This was the third increase of 2024, with additional price increases in January and September, he said.
“We expect that the most recent price adjustment and an ongoing focus on costs provide a healthy outlook for Egypt’s growth into full year 2026. [The] recent stability in currency markets, particularly in Egypt, bodes well for the group’s reported results for the year end.”
“I think the momentum that we’ve got in Egypt continues, and will continue well, given the traffic growth, given the regulatory environments, that bodes very well for the foreseeable future.”
In February, the group upgraded its medium-term guidance, expecting to grow earnings at least 10% between 2025 and 2030, driven by its international business. It estimates the Egypt business will have about a 20% compound annual growth.
While business is going well in the international market, the group’s ambitions at home in SA have been hampered by competition authorities choosing to block Vodacom and Remgro’s proposed fibre merger through Maziv, a R13bn affair.
On Monday, Vodacom shares closed up 2.97% at R125.14.
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