Vodacom, Led By Shameel Joosub, Poised For Major Comeback

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 Vodacoms 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 companys 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. Theres real upside potential in their Egypt play.

Vodacoms 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.xA0

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 Egypts 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 Vodacoms fintech platform will scale meaningfully as adoption rises, Chiume said. Its a long runway.