South Africa's second-biggest telecoms operator said on Tuesday it had upgraded the target from the mid-single digit range after reporting a 3.7% jump in full-year earnings.
Safaricom, which has the M-Pesa payments business, is part owned by Vodacom and Britain's Vodafone
Operating profit growth for Vodacom's international business, which includes M-Pesa, slipped 16.3% in the year ended March. But it is seen tracking ahead of the medium-term group target in the 2022 financial year, Vodacom's Chief Financial Officer Raisibe Morathi told analysts.
M-Pesa, which allows customers to send money, save, borrow and make payments, is expected to support the recovery, she said.
M-Pesa now processes $24.5 billion a month in transaction value across Vodacom's international markets, including Safaricom, up 63.5%, Vodacom said.
Vodacom's financial services business, like its peers, experienced a jump in transaction values and customer numbers during the pandemic, as movement restrictions and avoidance of physical cash pushed people towards mobile money platforms.
Vodacom sees future growth from this business, along with other new services such as digital, fibre and the internet of things.
Morathi said the group revenue contribution of these "beyond mobile" services, was seen increasing from about 17% in the 2021 financial year to between 25% to 30% in FY 2024 and above 30% in FY 2026.
In South Africa, Vodacom is launching a "super app" with digital payment provider Alipay, part of China's Alibaba group. Branded as VodaPay, it will allow consumers to shop online, pay bills and send money to relatives.
"We see this super-app as a precursor to M-Pesa's evolution, supporting accelerated growth across our financial services' businesses," Chief Executive Shameel Joosub said.
A soft launch is planned for the second quarter and a full launch in the third quarter, Joosub told analysts.
Asked whether Vodacom would spin-off M-Pesa, Joosub said: "We're not in the position yet where we think the time is optimal to sell or even monetise a portion of the asset, because we believe there is still a lot of growth left in M-Pesa."
"We would of course prefer it that the market recognises the value of these financial service assets, if not then we will consider," he said.
Rival MTN Group is considering spinning out its fibre and financial services businesses and could potentially list one of them to unlock value it said was trapped in its core business, it said March.
($1 = 14.0553 rand)
(Reporting by Nqobile Dludla; Editing by Jacqueline Wong, Rashmi Aich and Jane Merriman)
By Nqobile Dludla
