Vodacom (VOD): And the winner is?

Vodacom delivered decent performance in FY21, despite the zero-rating of peer-to-peer mobile money and significant reductions in SA effective data tariffs. The Covid-19 effect and lower data prices seems to have expedited market elasticity – supporting service revenue growth. Even though the award of the Ethiopian telecoms operating license seems to be a significant opportunity, our modelling suggests that the profitability of a vanilla telecoms license will largely be a function of the capex intensity required to build out a network.