Table of Contents
Key Points
- Vodacom hits $400 billion in mobile transactions, thanks to strong growth in Southern and Eastern Africa.
- Safaricom is a big part of Vodacom’s success, contributing $320 billion to the transaction total.
- Vodacom is facing stiff competition in West Africa as local providers and fintechs shake up the market.
Vodacom, led by South African executive Shameel Joosub, has announced a hit of $400 billion in mobile transactions over the past year, ending June 2024.
This figure shows Vodacom’s growing impact in mobile financial services across Africa, particularly in key markets like South Africa, Egypt, Mozambique, Tanzania, Lesotho, and the Democratic Republic of the Congo (DRC). By June, 46.6 million people were using Vodacom’s services in these regions.
Vodacom’s expansion in mobile financial services
The $400-billion achievement highlights Vodacom’s towards mobile financial services, a rapidly growing area for telecom companies in Africa. This growth is largely due to the company’s expansion in its core markets and its 35-percent stake in Kenya’s Safaricom.
Safaricom alone added about $320 billion in transaction volume, thanks to the success of its M-Pesa platform, which shows how telecom operators are branching out into financial services.
However, Vodacom’s influence in financial services is still more prominent in Southern and Eastern Africa. In West Africa, Vodacom lags behind competitors like MTN, Orange, Airtel Africa, and Moov Africa.
MTN, for example, reported $285.5 billion in transactions during the same period, with much of this coming from Nigeria and Côte d’Ivoire. Airtel Africa saw $115.5 billion in transactions, while Orange, despite not providing specific figures for Senegal and Côte d’Ivoire, reported $144.7 billion across its entire network.
Competitive challenges in West Africa
The competition in Africa’s mobile financial services market is heating up. In West Africa, new local players and fintech companies are making things tougher for established telecoms like Vodacom.
In Nigeria, for instance, banks are teaming up with fintech firms, reducing telecom operators’ roles to just providing connectivity. Newcomers like Wave in the WAEMU zone are also shaking up the market, pushing for more innovation and competition.
As income from traditional telecom services like calls and internet access continues to shrink due to competition, financial services have become a crucial growth area for companies like Vodacom. Yet, the success of mobile money services in regions like Kenya and Tanzania is hard to replicate elsewhere due to already high market penetration. Vodacom, along with its rivals, needs to navigate these challenges while finding new ways to grow its financial services.
