Vodacom reports 15.7% jump in H1 earnings as pandemic boosts growth

Vodacom, the South African telecommunications giant, has released its interim results showing a 15.7% increase in headline earnings per share. This growth comes despite the company's decision to reduce prices by up to 40% in South Africa starting from April. Vodacom CEO, Shameel Joosub, highlighted that the organization managed to capitalize on the opportunities presented by the shift to remote work, education, and entertainment brought about by the COVID-19 pandemic. Joosub also mentioned the significant role Vodacom played in providing affordable access to customers and supporting governments across the markets they operate in during these challenging times. Despite a one-off benefit from the reduction in tax rates in Kenya, Vodacom remains optimistic about the recovery in international markets, including Kenya, in the second half of the year. The company remains committed to investing in infrastructure to meet the growing data traffic demands. Joosub revealed plans to invest five billion rand in infrastructure in South Africa, with total spending for the year expected to be between 9.5 and 10 billion rand. Looking ahead to 2021, Joosub emphasized the importance of acquiring spectrum to drive down costs and position South Africa at the forefront of new technologies like 5G. He mentioned that while the spectrum auction would involve a significant cost, it was necessary to reduce the cost of data production. Joosub expressed Vodacom's commitment to continue lowering prices and further invest in innovation. Regarding the ongoing Makate matter, Joosub revealed that the parties could not reach an agreement, leading to him making a final determination. He mentioned that Mr. Makate is not satisfied with the outcome and is likely to challenge it in court, indicating a lengthy legal process ahead. Despite the challenges, Vodacom remains focused on its growth trajectory and commitment to providing affordable and innovative telecommunications solutions to its customers.