Vodacom is the largest supplier of cell phone connections in South Africa with 39 million local customers. It also has over 30 million customers outside South Africa. In the June 2017 quarter the company added 2,5 million new customers – 2,3 million of them in South Africa. Vodacom is owned about 65% by Vodaphone.
By anyone’s standards, this company is a blue chip. Most of its income is in the form of annuity income and it has a relatively low working capital requirement because it is a service company. It does have some exposure to union action, but appears to have that well under control. It is consistently profitable and is benefiting from the explosion of smart phone usage in South Africa. Read More