Vodacom (VOD) – Dark clouds gathering

There appears to be increasing regulatory scrutiny of the mobile telecoms sector by both the Competition Commission and ICASA. We have previously noted that there appears to be a lack of a functioning cost-plus wholesale model in SA. We believe that the increased focus on the sector could be a precursor to an indirect intervention in the sector. As the market leader, Vodacom is likely the most at risk in this regard.