THIRD-QUARTER RESULTS
Vodacom faces challenges despite revenue gains
After reporting strong third-quarter numbers, Vodacom faces a more challenging trading environment in which it will have to contend with regulatory risks and a stronger rand, an analyst says. Vodacom’s share price rose 5.45% to close at R163.50 on Wednesday after it said revenue growth accelerated to 6.7% in the quarter to end-December. Higher revenue, at R22.6bn, was supported by the addition of 2.5-million active customers as well as strong gains from mobile money service M-Pesa and data sales in the rest of Africa. "It looks like Vodacom is still executing well and is holding on to its dominant market position," said Mergence Investment Managers portfolio manager Peter Takaendesa. "However, the near-term outlook is likely to be challenging as they navigate a number of regulatory challenges in SA," he said. For instance, Vodacom’s contract to supply mobile communication services to government departments had come under the scrutiny of the Competition Commission. The telecom indust...
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