Vodacom shares slide amid price war
Shares in mobile operator, Vodacom declined as much as 3% in afternoon trade on the JSE on Thursday (17 May) as investors reacted to a price war the firm has seemingly waged with rival operator, Cell C.
On Wednesday (16 May), Vodacom announced the launch of its Freedom 99 prepaid tariff, offering calls to all networks at 99 cents per minute. It was announced mere minutes before Cell C said it had also reduced its prepaid call rates to 99 cents.
By 15:30 local time, shares in Vodacom declined 2.95% or R3.15 to R103.50 on the JSE having shipped more than 3% earlier in the session. MTN dropped R2.12 or 1.55% to R134.50, while Telkom (TKG) bucked the trend, adding 35 cents or 1.46% to R24.40.
The All Shares Index traded 0.96% off at 33,472 points.
A dealer at financial services group PSG Konsult said that the JSE was off on the day amid continued negative sentiment (stemming from global investors). However, he added that the market had likely also reacted to the “price war between Cell C and Vodacom”.
He added that following the recent uncertainty cast over rival MTN, a number of investors had moved into the more “defensive” stock of Vodacom, “which has run pretty well”. As a result, a number of investors were looking to cash in.
Vodacom is also expected to announce its annual results next week, something which would also be on the minds of investors.
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