Vodacom cuts dividend to fund growth after taking 55% of Safaricom
What's the deal? VodacomDealroom has a profile for this one. Try Dealroom → Group has raised its stake in Safaricom from 35% to 55%, effective June 30, 2026, and cut its dividend policy to a payout of at least 65% of headline earnings. The shift redirects cash from shareholder returns towards network infrastructure, digital and financial services, and deleveraging.
Why now? The Safaricom deal marks what chief executive officer Shameel Joosub called "a major milestone in our Vision 2030 journey." The larger stake adds scale and exposure across connectivity, digital services, and financial inclusion in Africa.
By the numbers: Group revenue rose 5.9% to R42.4 billion in the quarter ended June 30, 2026, or 11.4% on a normalised basis. Group service revenue climbed 6.3%, accelerating to 12.6% normalised.
Egypt led growth with service revenue up 32.8% in local currency and financial services revenue up 73%. Financial services now contribute more than 22% of group service revenue, up from 13%.
What's the endgame? The enlarged portfolio prompted Vodacom to raise its Vision 2030 revenue ambition from R200 billion to over R300 billion. It also upgraded its medium-term EBITDA and operating free cash flow growth targets from double-digit to early-teens.
Despite the lower payout ratio, Vodacom expects to grow its dividend per share in full year 2027. "The Board has reviewed our capital allocation framework to ensure flexibility and an appropriate balance," Joosub said.
Mobile money scale: Including Safaricom, Vodacom processes $547.9 billion in mobile wallet transaction value annually, up 19.1%. The group also invested a further R800 million into MazivDealroom has a profile for this one. Try Dealroom → to support the Herotel transaction and expand fibre reach in South Africa.
The signal: Vodacom is betting that reinvesting at higher returns will outweigh near-term investor appeal. The move signals a broader pivot in African telecoms towards financial services and fintech as core earnings drivers rather than side businesses.
Read more: The Bulrushes
Image credit: datakid musicman
