Vodacom Group has delivered a stunning financial performance for the 2026 financial year, reporting a 34% surge in annual profit to R26.7 billion, driven by explosive growth in its pan-African operations – particularly in Egypt, Kenya, and Ethiopia. The results, announced on Tuesday morning, underscore a fundamental shift in the telecom giant’s earnings profile, with its international operations increasingly outpacing the saturated and sluggish South African market.
The group’s revenue climbed 10.1% to R167.6 billion, comfortably beating analyst expectations of around R163 billion. Service revenue, a key metric that excludes handset and equipment sales, grew 9.8% on a normalized basis. But the headline figure that captured investor attention was the customer growth: Vodacom added 26 million new customers over the past twelve months, expanding its total subscriber base to 237.3 million users across its African footprint.
“This is a landmark year for Vodacom Group,” said CEO Shameel Joosub in a virtual presentation to investors and media. “Our strategy of diversifying beyond South Africa – into North, East, and Francophone Africa – is delivering exactly what we envisioned: high-growth markets, young populations adopting data and financial services, and resilient earnings even when our home market faces headwinds. We are no longer just a South African company. We are an African technology leader.”
Egypt: The New Crown Jewel
Egypt emerged as Vodacom’s fastest-growing market, a development that would have seemed unlikely just three years ago. The group acquired a controlling stake in Vodafone Egypt in 2022, and the integration has exceeded all internal targets. In the 2026 financial year, Egypt contributed R38.4 billion in revenue – a 22% year-on-year increase – driven by surging demand for mobile data, fintech services via Vodafone Cash, and enterprise solutions for the country’s rapidly digitizing economy.
“The Egyptian market is a phenomenon,” Joosub explained. “You have 110 million people, a young demographic, increasing smartphone penetration, and a government that is aggressively pushing digital transformation. We are riding that wave. Our data traffic in Egypt grew over 40% this year alone.”
Vodafone Cash, the Egyptian mobile money platform, now has over 12 million monthly active users, with transaction values increasing by 67% year-on-year. The service has become a critical tool for Egypt’s unbanked and underbanked populations, mirroring the success of M-PESA in East Africa.
Kenya: Safaricam Stake Pays Off Handsomely
Vodacom’s increased stake in Safaricom – Kenya’s dominant telecom operator – proved to be another masterstroke. The group raised its effective interest in Safaricom from 35% to 60% in early 2025, a deal worth over R40 billion at the time. In the 2026 results, Safaricom contributed R28.1 billion to Vodacom’s top line, with earnings before interest, tax, depreciation, and amortization (EBITDA) growing 15.2%.
M-PESA, Safaricom’s pioneering mobile money platform, remains the jewel in the crown. The service processed over $380 billion in transaction value during the year, equivalent to roughly 300% of Kenya’s GDP. Vodacom has begun replicating M-PESA’s blueprint across other markets, including Ethiopia, a strategic priority.
Ethiopia: The Long Game Begins to Pay
Perhaps the most closely watched part of Vodacom’s portfolio is Ethiopia – Africa’s second-most populous nation and one of the last major telecom liberalization stories. Vodacom, through its consortium Safaricom Ethiopia, launched commercial services in October 2023 after years of regulatory hurdles and infrastructure investment.
The 2026 results show that Safaricom Ethiopia now has 8.4 million customers, up from 4.1 million the previous year. Revenue grew 180% year-on-year, albeit from a low base. The operation remains loss-making – a reality Vodacom has consistently warned investors about – but the trajectory is encouraging. Network coverage has expanded to 42 cities, and the company has invested over $1.5 billion in infrastructure to date.
“Ethiopia is a ten-year story, not a two-year story,” Joosub cautioned. “But we are seeing the early signs of takeoff. Adoption of mobile data is accelerating. Business registrations are climbing. And we have not even launched M-PESA there yet – that is coming in early 2027. When that happens, Ethiopia will transform.”
South Africa: Weak Growth, Strong Cash Flow
The contrast with Vodacom’s domestic operations could not be starker. South African revenue grew just 2.3% to R75.2 billion – barely keeping pace with inflation. The local market added only 1.1 million new customers, a fraction of the group’s total growth. Margins in South Africa remain under pressure from intense competition with MTN, Telkom’s mobile unit, and an aggressive Rain.
Joosub acknowledged the challenges. “The South African consumer is under enormous pressure. High interest rates, load-shedding, rising fuel and food prices – all of this affects disposable income and spending on telecom services. Our prepaid segment has seen customers trading down to cheaper bundles. Postpaid churn has ticked up slightly. It is a tough environment.”
However, Vodacom South Africa remains a cash cow. The unit generated R18.4 billion in EBITDA, with a margin of 34.2% – still healthy by global standards. The company’s fixed-line and fibre-to-the-home business, Vumatel (acquired in 2024), added 189,000 new households during the year, partially offsetting weakness in mobile.
“Don’t write off South Africa,” Joosub insisted. “It remains our largest single market by revenue. It funds our expansion elsewhere. But clearly, our future growth will come from beyond our borders. That is not a failure of South Africa. It is a recognition of Africa’s potential.”
Financial Services: The Unseen Engine
Beyond traditional telecom, Vodacom’s financial services division – anchored by M-PESA in Kenya, Tanzania, DRC, Mozambique, and Lesotho – has become a major earnings driver. Revenue from financial services grew 31% to R12.8 billion, with over 62 million active M-PESA customers across the group. The total value of transactions processed on Vodacom’s fintech platforms exceeded $520 billion during the year.
“The line between telco and fintech is blurring,” said Chief Financial Officer Raisibe Lepule. “Increasingly, our customers come to us not just for calls and data, but for loans, savings, insurance, and international remittances. Our ecosystem approach – where a customer uses Vodacom for everything – is proving highly effective.”
Dividend and Shareholder Returns
Buoyed by the strong results, Vodacom declared a final dividend of 520 cents per share, bringing the total annual dividend to 980 cents per share – an increase of 9.5% from the prior year. The group also announced a R3 billion share buyback program, signaling confidence in its valuation and future prospects.
“We have a disciplined capital allocation framework,” Lepule explained. “First, we invest in growth – Egypt, Ethiopia, Kenya. Second, we maintain a strong balance sheet. Third, we return excess capital to shareholders. That is what we are doing today.”
Analyst Reaction: Positive but Cautious
Market reaction was broadly positive, with Vodacom’s share price climbing 3.8% in early Johannesburg trading. However, some analysts expressed caution about the sustainability of the Egypt and Kenya growth rates given currency volatility and geopolitical risks.
“Vodacom has executed brilliantly in Egypt and Kenya – no question,” said Irnest Kaplan, an independent telecom analyst. “But the Egyptian pound remains volatile, and the Kenyan shilling has weakened significantly. In rand terms, that helps Vodacom’s reported numbers, but in local currency terms, the growth is good but not spectacular. Investors need to watch forex exposure.”
Others were more bullish. “Vodacom is becoming a true pan-African powerhouse,” said Dobek Pater, director of Africa Analysis. “The Ethiopia bet is still risky, but if it pays off – and early signs are positive – then Vodacom will be the dominant telecom operator in Africa’s three largest economies: Nigeria (via its partnership with Vodafone and local operators), Egypt, and Ethiopia. That is a formidable position.”
The Road Ahead: What to Watch
Looking forward, Vodacom outlined several priorities:
- Ethiopia expansion: Launch of M-PESA and further network rollout to 55 cities by year-end.
- Egypt monetization: Increasing average revenue per user (ARPU) through upselling data and financial services.
- South Africa stabilization: Defending market share while controlling costs amid economic pressure.
- 5G rollout: Accelerating 5G deployment in South Africa, Kenya, and Egypt.
- M&A: Joosub confirmed the group remains “open to opportunistic acquisitions” in Francophone Africa.
“We are not finished,” Joosub said in closing. “Africa is the youngest, fastest-growing continent in the world. Her people need connectivity, capital, and services. Vodacom provides all three. Today’s results are a milestone, but they are not the destination. They are proof of concept. The next chapter will be even bigger.”
Key Financial Highlights – Vodacom Group FY2026
| Metric | FY2026 | FY2025 | Change |
|---|---|---|---|
| Annual profit | R26.7 billion | R19.9 billion | +34% |
| Revenue | R167.6 billion | R152.2 billion | +10.1% |
| Service revenue | R146.3 billion | R133.1 billion | +9.8% |
| EBITDA | R57.8 billion | R52.1 billion | +10.9% |
| Total customers | 237.3 million | 211.3 million | +26 million |
| Dividend per share | 980 cents | 895 cents | +9.5% |
| South Africa revenue | R75.2 billion | R73.5 billion | +2.3% |
| Egypt revenue | R38.4 billion | R31.5 billion | +22% |
| Kenya (Safaricom) contribution | R28.1 billion | R24.2 billion | +16% |
For South African investors who have watched the local economy stagnate, Vodacom’s results offer a glimpse of a different future: one where a JSE-listed company grows not despite South Africa’s struggles, but by looking beyond them. Whether that strategy can continue to deliver in an increasingly competitive and regulation-heavy African telecom landscape remains to be seen. For now, however, Shameel Joosub and his team are celebrating a very good year – and planning for an even better one.
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