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Vodacom, Airtel Africa see strong financial services growth

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Pan-African operators Vodacom and Airtel Africa reported strong quarterly results this week, with financial services revenue growth a highlight for both telcos.

Vodacom Group revenue for the third quarter ended December 31, 2023, increased 26.8% to R38.9 billion (US$2.1 billion), positively impacted by its acquisition of Vodafone Egypt.

Egypt grew service revenue by 29.1% in local currency, with Egyptian financial services customers growing 55.5% to 7.5 million.

International service revenue – from Mozambique, Lesotho, the Democratic Republic of Congo (DRC) and Tanzania – increased 10.7% as data revenue growth accelerated. However, Vodacom South Africa service revenue grew just 1.9%, due to a strong comparative period in the prior year.

Vodacom's network investment in its international business segment contributed to a 25.4% increase in 4G sites, "which ultimately supported an acceleration of local currency revenue growth," it said.

Vodacom customers across the Group – including Safaricom's operations in Kenya and Ethiopia – reached 200 million for the first time, after hitting the 100 million customer mark in 2018.

The group now has more than 75 million customers using one of its financial services offerings and facilitates $1.1 billion a day in mobile money transaction value.

Group financial services revenue increased 31% to R3.4 billion ($182 million), with $98.2 billion transacted through Vodacom's mobile money platforms during the last quarter.

"During the third quarter Vodacom Group celebrated a number of key milestones including Vodacom Mozambique's 20-year anniversary, the trialing of 5G in the DRC and the announcement of Project Kuiper, a strategic collaboration with Amazon's low Earth orbit satellite (LEO) communications initiative," Vodacom Group CEO Shameel Joosub said in a statement about the results.

Vodacom Group CEO Shameel Joosub.   (Source: Vodacom)
Vodacom Group CEO Shameel Joosub.
(Source: Vodacom)

"Project Kuiper adds to our satellite partnerships that will extend the reach of 4G and 5G services to more of our customers in Africa and in particular in areas that may otherwise be operationally challenging or prohibitively expensive to serve via traditional fiber or microwave solutions," he added.

Joosub said Vodacom's super app roll-out across its footprint remains a major focus for the group. In South Africa, super app VodaPay has now reached 4.8 million registered users.

Looking ahead, he said the operator is alert to financial constraints on customers caused by the high cost of living, and it's mindful of an evolving macro-economic environment across its footprint – including foreign exchange rate risk. But he expects the operator's business model will continue to prove resilient.

Airtel Africa grows

Airtel Africa reported that its customer base grew by 9.1%, to 151.2 million, during the nine-month period ended December 31, 2023.

The group, which operates in 14 countries in Africa, said the penetration of mobile data and mobile money services continued to rise, driving a 22.4% increase in data customers to 62.7 million; and a 19.5% increase in mobile money customers to 37.5 million.

Airtel Africa's revenue, in constant currency terms, grew by 21% in the third quarter and by 20.2% for the nine-month period, to $3.86 billion. However, reported currency revenues declined by 8.3% in Q3 and by 1.4% for the nine-month period, largely impacted by currency devaluation.

"Whilst further currency devaluation, particularly in Nigeria, has weighed on our reported financial performance, it will not affect the execution of our growth plans," said Airtel Africa Group CEO Olusegun Ogunsanya.

Constant currency mobile money revenue grew by 31.8% and the group's mobile money platform transacted $116 billion during the third quarter.

Airtel Africa spent $494 million in capex over the nine months, 8.2% higher than the same period the previous year. It said its capex guidance for the full year remains between $800 million and $825 million as it continues to invest for future growth.

Ogunsanya said demand for voice, data and mobile money services remains resilient in the African market.

Across the Group, mobile services revenue grew by 18.6% in constant currency terms, driven by voice revenue growth of 11.2% and data revenue growth of 28.5%.

"I am pleased to note that our sustained focus on capital allocation priorities will enable us to fully repay HoldCo debt [of $550 million] when due in May 2024, ensuring the continued success of our balance sheet de-risking strategy," Ogunsanya explained.

"This will allow us to continue investing in our strategic priorities to provide affordable and reliable services to customers across our markets, whilst also enabling us to capitalize on new business opportunities, such as our new data center business, Nxtra by Airtel, which we launched in December," he added.

Airtel Africa Group CEO Segun Ogunsanya.   (Source: Airtel Africa)
Airtel Africa Group CEO Segun Ogunsanya.
(Source: Airtel Africa)

"In light of our consistent strong operating performance and given current leverage, the Board intends to launch a share buy-back program of up to $100 million, starting early March 2024 over a 12-month period," Ogunsanya said.

"We continue to be well positioned to deliver on the attractive growth opportunities our markets offer and despite the challenge of rising diesel prices, ongoing currency devaluation and inflationary pressures across some of our markets, we remain focused on margin resilience," the CEO added.

Ogunsanya said Airtel Africa's five-year, $57 million partnership with UNICEF has launched across ten of its markets, providing free access to educational resources as it aims to impact the lives of over 1 million children through its educational programs by 2027.


Follow Connecting Africa on our new X account @connect__africa to get the latest telecoms and tech news across Africa.


Ogunsanya plans to retire this year, after more than a decade at the operator, with Airtel Director of Transformation Sunil Taldar taking over his role at the start of July.

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*Top image source: senivpetro on Freepik.

— Paula Gilbert, Editor, Connecting Africa

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