South Africa’s Vodacom Group has raised its medium-term financial targets after completing the acquisition of an additional stake in Kenya’s Safaricom, prompting parent company Vodafone to also upgrade its earnings outlook.
Vodacom said the acquisition strengthens its exposure to one of Africa’s fastest-growing telecommunications markets and is expected to accelerate earnings growth over the next three years. The revised targets reflect stronger revenue expectations, expanding data demand and improved operational efficiencies following the transaction.
The company now expects service revenue to grow by between 8% and 10% annually over the medium term, up from its previous target of 6% to 8%. Earnings before interest, tax, depreciation and amortisation (EBITDA) are projected to increase by 11% to 13% a year, compared with the earlier guidance of 7% to 9%. Capital expenditure is expected to remain between 13% and 14.5% of revenue.
Vodacom completed the purchase of an additional 4.95% stake in Safaricom from Vodafone earlier this month, increasing its holding in Kenya’s largest telecommunications operator to 39.93%.
Vodafone retains a controlling interest in Vodacom and continues to hold an indirect stake in Safaricom through the South African operator.
The revised targets came as Vodafone also upgraded its full-year outlook to reflect the completed transaction.
The UK-based telecommunications group said it now expects adjusted EBITDAaL of between $13.9 billion and $14.1 billion for the financial year, compared with its previous forecast of $13.4 billion to $13.6 billion. It also expects adjusted free cash flow to reach the upper end of its revised guidance range.
Vodafone said the updated forecast incorporates the financial contribution from Safaricom following the transfer of the additional stake to Vodacom. Excluding the acquisition, the company’s underlying earnings outlook remained unchanged.
Chief Executive Margherita Della Valle said Vodafone continued to make progress in improving operational performance across its markets while simplifying the group’s structure.
Safaricom remains one of Africa’s most profitable telecom operators, driven by the success of its mobile money platform M-Pesa alongside strong demand for mobile data and enterprise services. The increased investment gives Vodacom greater exposure to East Africa, complementing its operations in South Africa, Tanzania, the Democratic Republic of Congo, Mozambique and Lesotho.
The transaction also reinforces Vodafone’s strategy of consolidating its African operations through Vodacom while maintaining exposure to the continent’s long-term growth prospects.
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Emmanuel Abara Benson is a business journalist and editor covering artificial intelligence, global markets, and emerging technology.
He has previously worked with Business Insider Africa and Nairametrics, reporting on finance, startups, and innovation.
His work focuses on AI, digital economy, and global tech trends.
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