As telecommunications giant Vodacom Group wraps up the quarter ended June 30 with growth, the completion of its acquisition of a controlling stake in Safaricom marked a defining moment for the group.

In a trading update for the quarter ended June 30, Vodacom Group CEO Shameel Joosub on Monday highlighted that the Safaricom transaction was completed effective June 30, increasing the company’s shareholding from 35% to 55%.

“This strategically important transaction represents a major milestone in our Vision 2030 journey, significantly enhancing the group’s scale, diversification and long-term growth prospects,” he said, adding that the transaction also materially expands the scale of its financial services footprint, increasing the contribution of financial services to group service revenue from 13% to more than 22%.

“We are now entering a new phase of growth, supported by a more balanced portfolio, broader earnings drivers and increased exposure to some of Africa’s most attractive opportunities in connectivity, digital services and financial inclusion,” he said.

Reflecting the stronger growth profile, Vodacom upgraded its medium-term earnings before interest, taxes, depreciation and amortisation and operating free cash flow growth targets from double-digit to early-teens growth.

Further, the strengthened diversified portfolio and sustained operational momentum across the business enabled Vodacom Group to enhance its Vision 2030 Group revenue ambition from more than R200-billion to more than R300-billion.

The group will operate with a more balanced and diversified portfolio, with meaningful earnings contributions across four segments: a cash generative South African operation, alongside higher-growth businesses in Safaricom, Egypt and International business, he explained.

“Our first-quarter performance highlights the benefits of our diversification strategy, with strong contributions from Egypt and our International business reinforcing the resilience and balance of our portfolio.”

During the quarter under review, Vodacom Group revenue increased by 5.9% to R42.4-billion, while group service revenue rose by 6.3% to R34.3-billion, supported by growth in financial services revenue, which increased by 17.8%.

“While the strength of the rand created translation headwinds, the robust underlying local currency performance across our markets underscores the structural momentum within the business,” Joosub commented.

Normalised group service revenue growth of 12.6% remains on track to deliver on the company’s medium-term ambition of double-digit growth.

Egypt delivered an “exceptional” performance, achieving service revenue growth of 32.8% in local currency, supported by investments into spectrum and network, while the operations’ financial services revenue surged 73%.

South Africa delivered a stable performance with service revenue growth of 2%, supported by an improved prepaid performance.

“Pleasingly, our South Africa prepaid segment returned to growth in the quarter, reflecting the positive impact of the actions we have taken to improve value and simplify propositions.”

The International business service revenue increased by 4.1% in rands, with normalised growth of 14%, continuing good momentum into the first quarter, supported by strong contributions from Tanzania, the Democratic Republic of Congo and Lesotho.

Beyond mobile services remained a key growth driver, contributing R7.8-billion, equivalent to 22.8% of group service revenue.

Financial services remains the largest component of beyond mobile and a key strategic growth engine, with group financial services revenue increasing by 17.8% to R4.5-billion, while normalised growth accelerated to 27%.

About $547.9-billion in transactions were processed through Vodacom Group’s mobile money platforms, including Safaricom, over the last 12 months, an increase of 19.1%.

“In fixed, we advanced our strategy in South Africa by investing a further R800-billion into Maziv to support the completion of the Herotel transaction,” Joosub said, pointing out that Maziv is well positioned to accelerate fibre reach in South Africa, fostering economic development and helping bridge South Africa’s digital divide.

Following the completion of milestone transactions, Maziv and Safaricom, Vodacom has shaped its strategy for the future.

“Our focus now shifts to unlocking the full potential of our portfolio through disciplined execution, innovation and capital allocation,” Joosub continued.

“As our earnings mix increasingly shifts towards faster-growing markets and beyond-mobile services, we have a greater opportunity to reinvest capital at higher rates of growth and attractive returns, while continuing to strengthen the balance sheet.”

In line with this, Vodacom’s board has reviewed the capital allocation framework to ensure flexibility and an appropriate balance between investing in network infrastructure, scaling digital and financial services, progressive deleveraging and delivering attractive shareholder returns.

Further, the board has decided to update the dividend policy to a payout of at least 65% of headline earnings.

“At this revised payout level, we expect to grow the dividend a share for the 2027 financial year, based on our current growth trajectory and the prevailing economic conditions.”