TELECOMMUNICATIONS

This sector is dominated by a duopoly comprising of MTN and Vodacom, with Blue Label Telecoms a niche player lacking the base-station infrastructure of the other two.

 INDUSTRY EXPOSURES

Business:  Both Vodacom and MTN have expanded operations across Africa, bringing their leap-frogging technology to the continent. With revenues from voice and data falling, the companies find themselves competing with internet based services, and have been forced to join in the technology revolution and become platforms for these services themselves. Issues in this report:

  • Macroeconomic trends affecting the telecoms industry

  • Competition from full-stack, digitised competitors 

  • Sharing of revenue through licences and taxes with host governments

  • Systems integrity in the face of ongoing technology upgrades, vandalism and Eskimo power outages

Environment: A relatively moderate impact on the environment. 

Society: Although mobile and internet penetration have been steadily increasing (78% in 2022), there remains a digital divide, where rural and underserved areas continue to have limited access to high-speed internet, resulting in the following societal issues:

  • Fair treatment of lower LSM customers through favourable pricing  

  • Access to communication for the under-served

  • Protection of data and personal information

  • Disputes with host governments over anti-terrorism legislation

Governance: Each company has its own governance vulnerabilities:

  • MTN: Size and spread of operations across the Africa continent places high demand on a competent and skilled board

  • VOD: Relatively stable board, long-serving CEO and low inherent vulnerability; however, being part owned by Vodafone presents a potential risk to minority sharholders

  • BLU: Founder brothers have a ‘cowboy’ reputation for rash decisions, including the acquisition of Cell-C, which is insolvent and struggling to provide value for customers and has consistently operated at a loss.

In this report

  • MTN (MTN)

  • Vodacom (VOD)

  • Blue Label Telecoms (BLU)

Price: $455

Included:

  • Full 17-page report covering all 3 companies in the Telecommunications sector

  • Introductory in-person consultation, scheduled at your convenience; learn more about how to link FarSight scores with your valuation process, and get up-to-date answers to specifics on each company under coverage.