Read time: 3 minutes

Vodacom rakes in over R2bn with financial services

Vodacom experienced a 12.5% increase in financial services revenue to breach the R2-billion mark for the first time in a quarter, according to the operator’s trading update for the quarter ended 31 December 2021.

Describing financial services as a strategic priority for the Group, Shameel Joosub, Vodacom Group CEO said the company’s M-Pesa platform, including Safaricom, “continues to scale at an impressive rate with transaction values up 16.1% to exceed R430 billion per month.”

“In South Africa, the launch of our VodaPay super-app in October last year has exceeded our expectations by attracting 1.4 million downloads and 1.0 million registered users in its first three months. We see VodaPay as a precursor to M-Pesa’s evolution and further strengthening our Fintech position across our footprint.”

Vodacom Group CEO Shameel Joosub.
Vodacom Group CEO Shameel Joosub.

Joosub added that in South Africa, the Group invested a further R2.3-billion in the network during the quarter and service 45.7 million customers, which equates to an increase of 3.3% in a year, and which contributed to a 4.5% increase in service revenue.

Vodacom Tanzania

Vodacom Tanzania announced that it distribute a total of TZS 3.4-billion in dividend to its M-Pesa customers who have used the service over the 2021 last quarter.

According to the operator, the dividend payment covers the months of October to December which is the third quarter of the company’s financial year.

Vodacom’s M-Commerce Director Epimack Mbeteni said that the profit will be paid to all individual customers, retail agents and other M-Pesa business partners who will receive payment based transactions made via their mobile wallets.

“Our mobile money service, M-Pesa, continues to be a remarkable success story, delivering significant social and financial value to Tanzanians. We have seen substantial growth on the M-Pesa platform with more customers, agents, merchants and institutions transacting around TZS 100-billion each day. In line with regulations of the Bank of Tanzania, interest earned from the deposit is periodically shared with the customers. Today we are happy to share a dividend of Tzs 3.4-billion with our over eight million customers across the nation,” he said.

Vodacom Tanzania stated that according to recent figures released by TCRA (Tanzania Communications Regulatory Authority) it has over 11 million customers on its M-Pesa platform commanding a market share of 40%.

Acquisition value

Joosub also referenced the acquisitions announced in November 2021: a majority interest in Vodafone Egypt and a strategic stake in the fibre assets of Community Investment Ventures Holdings (Pty) Limited (CIVH).

He said, “The CIVH fibre transaction in South Africa is also expected to accelerate Vodacom’s purpose of connecting people for a better future by facilitating an ambitious fibre roll-out programme that will assist in narrowing the digital divide by enabling affordable access to connectivity in some of the most vulnerable parts of our society. Vodacom has submitted regulatory filings in respect of the transaction to the Competition Commission and ICASA, respectively, initiating a process to obtain regulatory approval."

Vodacom said it would fund the acquisition of a 55% stake in Vodafone Egypt by issuing 242 million new ordinary shares at R135.75 per share and R8.2-billion (US$548-million) in cash. This values the proposed transaction at circa R41-billion or US$2.738-billion.

In early January 2022, shareholders gave the transaction the official ‘thumbs up’ and Joosub stated: “With over 80% of Egypt’s 100 million population unbanked, Vodacom sees enormous potential to leverage our financial services platforms, global partnerships and best practices in a significant market.”

Vodacom looks to cement the deal by 31 March 2022, but the transaction still requires regulatory approval from the National Telecom Regulatory Authority of Egypt (NTRA) and Egypt’s Financial Regulatory Authority.

Daily newsletter