Vodacom Integrated Report 2018

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Macroeconomic and political
uncertainty
Challenging macroeconomic conditions in each of our markets is
impacting investment, consumer disposable income, revenue growth and
operating costs.
g g In South Africa, our largest market, we have felt the impact of flat GDP
growth rates, credit ratings downgrade, fiscal deterioration and volatile
exchange rates, coupled with the political uncertainty in the run-up to
the ANC leadership election in December 2017. The outcome of that
election, and subsequent change in the country’s political leadership,
led to some renewed business and investor confidence.
g g In our International operations, we are seeing an easing of inflationary
pressures in some markets, and evidence that economic growth is likely
to accelerate slightly. There is an increasing polarisation of politics across
most markets, with some of them facing election uncertainties. In all of
these markets telcos are facing sustained pressure from the introduction
of new taxes.
Continuing challenges in macroeconomic indicators highlight the
importance of maintaining a strong efficiency drive, as well as
providing strategically segmented products and services across
consumer income groups, including those specifically aimed at
low-spend customers. In South Africa we are seeing strong uptake in
our Siyakha platform, while our M-Pesa mobile money offering
continues to deliver strong growth across our International operations.
We believe our strategic big bets are well placed in the context of the
current and anticipated macroeconomic environment.
Implications for our strategy
Source: GSMA Intelligence, The mobile economy 2018
Mobile industry contribution to GDP
Regulatory intervention and
policy uncertainty
We continue to face regulatory challenges across our operations, with
implications for revenue growth and cost efficiency. Significant regulatory
and policy developments (by country), include:
g g South Africa: The Electronic Communications Amendment Bill
and the associated delay in licensing of spectrum bands; and End-User
and Subscriber Service Charter Regulations by ICASA.
g g Tanzania: National security and customer SIM registration; mobile
financial services licences and regulations; tax revenue collection
systems; and mobile termination rates (MTR) review.
g g DRC: Communications Bill introducing changes to licence regimes;
national security and customer SIM registration regulations; MTR
regulation; temporary social media bans; and new taxes.
g g Mozambique: M-Pesa recapitalisation requirements; 2G licence renewal;
imminent spectrum auction; and national security.
g g Lesotho: Renewal of mobile financial services licence; national security
and customer SIM registration regulations; and VAT increase in FY2019.
Anticipating, informing and responding to regulatory and policy
developments requires that we develop and maintain proactive
relations with governments, informed by mutual trust and respect, and
a shared understanding on the need for more inclusive economic
development. Our Vision 2020 strategy places a strong emphasis on
democratising data access, and empowering a connected society.
Implications for our strategy
Further details on our regulatory matters can be found in
our Regulatory report at
13
Our business Our performance Our governance Administration
4.5% $3.6tn
2017
5.0% $4.6tn
2022