Vodacom Group reduced its dividend policy to a minimum payout of 65% of headline earnings in the quarter ended June 30, 2026, down from previous levels, as the telecommunications company shifts capital toward network infrastructure investment and digital services scaling. The policy revision follows Vodacom's increase of its Safaricom stake from 35% to 55%, effective June 30, 2026, a transaction that significantly expands the group's exposure to African connectivity and financial inclusion markets. The company prioritizes reinvestment over immediate shareholder returns to support its Vision 2030 expansion strategy across the continent.
Despite the reduced payout ratio, Vodacom expects to grow dividend per share for full year 2027, supported by its current growth trajectory and prevailing economic conditions.
Vodacom Increases Safaricom Stake to 55% Effective June 30, 2026
The quarter marked a watershed moment with Vodacom increasing its stake in Safaricom from 35% to 55%, effective June 30, 2026. The transaction significantly enhances the group's scale, diversification, and long-term growth prospects, adding exposure to Africa's most attractive opportunities in connectivity, digital services, and financial inclusion.
"This strategically important transaction represents a major milestone in our Vision 2030 journey," said Shameel Joosub, Vodacom Group CEO. "We are now entering a new phase of growth, supported by a more balanced portfolio, broader earnings drivers, and increased exposure to Africa's most attractive opportunities."
Vodacom Upgrades EBITDA Growth Target to Early-Teens
The strengthened portfolio has prompted the Group to upgrade its medium-term guidance. EBITDA growth target was upgraded from double-digit to early-teens growth. Operating free cash flow target was upgraded from double-digit to early-teens growth. Vision 2030 Group revenue ambition was raised from R200 billion to R300 billion+.
Financial services now contribute more than 22% of Group service revenue, up from 13%, reinforcing Vodacom's leadership in African fintech.
Vodacom Reports Q1 2026 Revenue of R42.4 Billion
Group revenue increased 5.9% to R42.4 billion in the quarter ended June 30, 2026, with normalized growth of 11.4%, impacted by translation effects from the stronger rand. Group service revenue rose 6.3%, with normalized growth accelerating to 12.6%, tracking favorably against medium-term targets.
In South Africa, service revenue increased 2.0%, supported by improved prepaid performance. Egypt service revenue grew 32.8% in local currency, with financial services revenue up 73.0%. International Business service revenue rose 4.1% in rands, with normalized growth of 14.0%. Group Financial Services revenue increased 17.8% to R4.5 billion, with normalized growth of 27.0%.
Beyond mobile services contributed R7.8 billion, equivalent to 22.8% of Group service revenue.
Vodacom Processes $547.9 Billion in Annual Mobile Wallet Transactions
Including Safaricom, Vodacom processes $547.9 billion in mobile wallet transaction value annually, representing 19.1% growth. The figure emphasizes the group's dominant position in African financial inclusion.
"Against this enhanced growth trajectory, the Board has reviewed our capital allocation framework to ensure flexibility and an appropriate balance between investing in network infrastructure, scaling digital and financial services, progressive deleveraging and delivering attractive shareholder returns," Joosub explained.
The revised dividend policy reflects management's confidence in the group's growth prospects and commitment to reinvesting capital at higher rates of return.
Vodacom Invests R800 Million in Maziv for Fixed Network Expansion
Vodacom advanced its fixed strategy in South Africa by investing a further R800 million into Maziv, supporting the completion of the Herotel transaction. The investment positions Maziv to accelerate fibre reach, fostering economic development and bridging South Africa's digital divide.
Vodacom Launches Africa's First Mobile Money Tap-to-Pay in Tanzania
During the quarter, Vodacom launched Africa's first mobile money tap-to-pay solution in Tanzania, enabling 22 million+ M-Pesa customers to make seamless contactless payments. In DRC, anonymized mobile data analytics are supporting Ebola preparedness efforts, while Ethiopia partnerships are creating sustainable livelihood opportunities for vulnerable youth.
"Following the completion of milestone transactions, Maziv and Safaricom, Vodacom has shaped its strategy for the future. Our focus now shifts to unlocking the full potential of our portfolio through disciplined execution, innovation, and capital allocation," Joosub concluded.
Vodacom remains well-positioned to deliver sustainable growth and attractive returns, guided by Vision 2030 — connecting people for a better future.
FAQ
What dividend policy did Vodacom announce in the quarter ended June 30, 2026?
Vodacom announced a revised dividend policy of at least 65% of headline earnings, down from previous levels, as the company shifts capital toward network infrastructure investment and digital services scaling following its Safaricom acquisition.
How much did Vodacom increase its Safaricom stake?
Vodacom increased its stake in Safaricom from 35% to 55%, effective June 30, 2026, significantly enhancing the group's exposure to African connectivity, digital services, and financial inclusion markets.
What revenue did Vodacom report for Q1 2026?
Vodacom reported Group revenue of R42.4 billion for the quarter ended June 30, 2026, representing a 5.9% increase, with normalized growth of 11.4% impacted by translation effects from the stronger rand.
