Vodacom Tanzania shares slump amid market correction
DAR ES SALAAM: The share performance of Vodacom Tanzania, the only major telecom listed on the Dar es Salaam Stock Exchange (DSE), has become a source of unease for investors and policymakers.
Vodacom’s stock, which debuted at 850/- per share in 2017, closed at 575/- last Friday, leaving early investors with deep losses despite the company’s solid operational performance.
This decline stands in stark contrast to the firm’s strong financials. Vodacom has reported robust growth in key revenue streams, particularly from its M-Pesa mobile money platform and data services, while maintaining a dominant market position.
After a difficult period between 2020 and 2022 marked by regulatory levies and external pressures, the company has since bounced back to profitability. Net profit rose from 44.6bn/- in FY2023 to 90.5bn/- in the year ending March 2025.
Yet the stock continues to disappoint shareholders, creating a striking disconnect between its intrinsic value and market price.
Market experts say the slump is best seen as a natural market correction to equilibrium price.
“The recent movement in Vodacom’s share price is best understood as a natural market correction rather than a reflection of weak fundamentals,” said Raphael Masumbuko, Chief Executive Officer of Zan Securities Ltd.
He noted that after initially dropping to 480/- in June, following new trading rules, the share price has now stabilised in the 575/- to 585/- range.
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Masumbuko also dismissed claims of illiquidity, pointing out that Vodacom shares worth 2.3bn/- have already been traded on the normal board since the reformts took effect.
“This stability signals that investors are reassessing the stock on the basis of its intrinsic value rather than short-term market dislocations,” he added.
The Manager for Advisory and Capital Markets at Vertex International Securities Ltd., Ahmed Nganya shares the views that the share price movement reflects “a natural adjustment as the market finds its equilibrium.”
Nganya’s view aligns with the idea that the market is now finding its equilibrium, having moved past the initial shock and emotional trading that may have followed the changes.
This suggests the current price is a more rational valuation of the company’s strong performance and future potential.
Vodacom is the first—and so far only—telecom to comply with the Electronic and Postal Communications Act (EPOCA), which requires telecoms to list on the stock exchange to foster local ownership.
Still, the government has acknowledged public frustration. In May, Minister for Information, Communication and Information Technology Jerry Silaa told Parliament the outcome was “contrary to expectations” and said the law is under review to find a sustainable solution.
While many investors remain disappointed, some analysts see a silver lining and view the current price as a buying opportunity.
Dar es Salaam-based economist Leonard Joseph described the slump as a “blessing in disguise” for new investors.
“This is the right time to buy Vodacom shares because they are undervalued,” he said, noting that the company’s strong fundamentals and growth prospects suggest the market price does not reflect true value.
Financial models such as discounted cash flow (DCF) analysis also support this view, highlighting a gap between Vodacom’s current share price and its long-term cash flow potential.
ENDS
