Vodacom (VOD) – Rebased expectations

We rebase our expectations of Vodacom’s earnings downwards mainly as a result of more conservative expectations of SA data growth over the medium term, the dilutive impact of the roaming agreement with Rain and the dilutive impact of higher levels of smartphone distribution to support data penetration growth. That said, Vodacom’s market leadership is likely to be reinforced by the distribution of spectrum in SA, significantly improved digital platforms and strong growth from the Safaricom associate.