Vodacom Group Ltd. plans to roll out financial-services products in its new market of Egypt, using the super app the wireless carrier is developing alongside China’s Alibaba Group Holdings Ltd.
(Bloomberg) — Vodacom Group Ltd. plans to roll out financial-services products in its new market of Egypt, using the super app the wireless carrier is developing alongside China’s Alibaba Group Holdings Ltd.
The Johannesburg-based company has received approvals to buy the Egypt business from its parent, Vodafone Group Plc, for $2.7 billion, Chief Executive Officer Shameel Joosub said in an interview. Vodacom is also negotiating the terms of a mobile-money license in Ethiopia, where it will likely use the M-Pesa platform of Kenyan partner Safaricom Ltd., he said.
“We see double-digit growth in financial services for the foreseeable future,” Joosub said by phone after Vodacom reported first-half earnings that missed analyst estimates. “In Egypt, we want to start the full Alipay platform soon, and we expect to start our mobile-money services in Ethiopia by early next year.”
Africa-focused telecom operators have invested heavily in financial-technology products to boost revenue on a continent that lacks physical banking infrastructure. Vodacom’s Johannesburg-based rival, MTN Group Ltd., is working on a deal to bring strategic partners into its financial services unit. Vodacom may consider a fintech carve out, Joosub said, though no decision has been taken.
Vodacom and Alibaba’s super app, called Vodapay, enables subscribers to access a broad range of services including taking out loans, shopping online and making standard mobile payments, similar to Tencent Holding Ltd.’s WeChat.
Vodacom shares fell as much as 6.5% on Monday, the most since March 2020, after the earnings miss and a decision to cut the interim dividend. Vodacom is more than 60% owned by the U.K.’s Vodafone.
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