Vodacom Profit Target Increases After Purchasing Safaricom Shares
The Vodacom Group has announced that it has updated its profit outlook following its acquisition of East Africa’s largest mobile phone firm that’s helping it enter into the financial services market.
Vodacom’s CEO Shameel Joosub issued an emailed statement saying that the wireless provider now expects a higher growth rate in profit for the next three years.
Vodacom purchased 35% of Nairobi-based Safaricom from the Vodafone Group in 2017 to expand its operations in sub-Saharan Africa operations and to add mobile money to its offering.
Vodacom revealed that it had been struggling with a sluggish economy in South Africa, where it is under pressure to decrease its data costs following a recent competition probe. Sales growth in the mobile operator’s businesses elsewhere in Africa increased 15% faster than that of South Africa.
While the results weren’t great, there would be no more bad news for Vodacom because the Safaricom acquisition has brought a decent outlook for the group, according to Nick Kunze, a manager at Sanlam Private Wealth.
Vodacom shares have increased by 2.7%, paring losses to 14% this year.
Joosub said that the Safaricom acquisition had proven to be an essential element for extending Vodacom’s mobile money leadership position in Africa and in making sure that financial services become a significant contributor to the group’s overall revenue.
Credit: This article originated from www.techcentral.co.za