Vodacom shares touch fresh highs

Vodacom added 3.67% to close at its strongest level on the JSE on Tuesday (8 April), at R138.75.

In early morning trade on Wednesday (9 April), the stock slipped half a percent to R137.94, giving the company a market cap of R205.2 billion.

Earlier this month, Vodacom said that it was still in talks to acquire Neotel, shrugging off speculation that negotiations had fallen through, as reported in the Indian press.

Shares in the group climbed 2% on the news that talks were still on.

The Economic Times had reported the deal worth a potential $590 million could disintegrate because the South African regulator was contemplating whether or not to allow the transfer of Neotel’s spectrum to Vodacom.

“We’re busy finalising the agreements and in the final stages of that part of negotiation,” Vodacom spokesman Richard Boorman said. “That article in the Indian Economic Times is just plain wrong.”

Vodacom has also been embroiled in a court case with regulator Icasa, over call termination rates.

South Gauteng High Court judge Haseena Mayat declared the “Second Call Termination Amendment Regulations, 2014” invalid and unlawful on 31 March 2014, and ordered the regulator to review its regulations within six months.

The judge suspended the declaration of invalidity for six months, with the new rates therefore kicking in on 1 April 2014.

Under the court’s ruling, Vodacom and MTN therefore dropped their mobile termination rates from 40 cents per minute to 20 cents per minute, while calls to Cell C and Telkom Mobile carry a 44 cents per minute termination rate.

Shares in Vodacom have shown a 52-week return of 37%, with a market cap exceeding R203 billion. On Tuesday, the group touched an intraday best level of R138.99.

In February, Vodacom announced a 10.5% rise in group revenue to R20.2 billion for the quarter ended December 2013.

Group active customers grew 12.3% to 56.0 million, and active data customers grew 27.9% to 23.7 million.

The operator said that group service revenue increased 6.4% to R16.248 billion, while group data revenue increased 40.7% to R3.611 billion, representing 22.2% of service revenue.

More on Vodacom

Court ruling costs Vodacom R500 million

Vodacom Neotel deal valued at $460 million

Vodacom, Neotel deal hits a snag: report

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Vodacom shares touch fresh highs