The weakness of the South African ran, which reached a five-year low last month, is hurting\u00a0mobile operator Vodacom, according to a report from Reuters.<\/p>\n
The international news agency reported that\u00a0Vodacom Group, which is 65% owned by Vodafone, is negotiating with its global suppliers to bring down prices because of the weaker local unit, citing CFO Ivan Dittrich on a call with analysts.<\/p>\n
The bulk of its capital expenditure and a “meaningful” amount of its operating expenses, particularly network costs, are denominated in foreign currencies,\u00a0Dittrich said.<\/p>\n
“It’s a pity,” Vodacom chief executive Shameel Joosub said on the conference call. “Because obviously we could get more equipment if the rand was more stable.”<\/p>\n
While Vodacom hedges its rand exposure and has some operations outside South Africa, it generates as much as 80% of its revenue from within South Africa.<\/p>\n
MTN Group meanwhile, has a far bigger spread in the rest of Africa, and the Middle-East, which\u00a0ensures a greater lift from a softer rand.<\/p>\n
The rand has lost as much as 8% in 2014, following an 18% slide in 2013.<\/p>\n
Vodacom: MTRs could cost us R1 billion<\/strong><\/a><\/p>\n Vodacom lifts quarterly revenue by 10.5%<\/strong><\/a><\/p>\n