Why Safaricom Is Driving Vodafone’s Higher 2026 Earnings Forecast: What It Means for Africa’s Telecom Industry 

Vodafone has given investors another reason to watch Africa. Adding Kenya’s Safaricom to its results has demonstrated how valuable the African business has become, prompting the telecoms giant to raise its earnings guidance for the 2026-27 financial year. This comes after a strong performance in the first quarter and marks a major change in Vodafone’s growth strategy. And it’s not only the mature European markets that the company is banking on. It’s also increasingly profiting from its fast-growing African operations, where demand for mobile data and digital financial services continues to soar.

Why Safaricom Is Driving Vodafone’s Higher 2026 Earnings Forecast

The improved outlook at Vodafone is mainly as a result of the consolidation of Safaricom following the completion of its transaction through Vodacom. This means that the revenues and earnings of Safaricom now directly affect the financial performance of Vodafone. For the financial year to March 2027, Vodafone expects adjusted core earnings to be €13.0 billion to €13.3 billion. Adjusted free cash flow is forecast at €2.6 billion to €2.9 billion, with management saying results should be at the high end of that range after a strong start to the year. Vodafone’s chief executive Margherita Della Valle said the growth was broad based across its business and particularly in Africa and Turkey where demand for connectivity was still strong.

Africa Is Becoming Vodafone’s Growth Engine

Vodafone has been hit by slower growth in a number of European markets for years, hampered by intense competition and market saturation. But Africa’s got a different story to tell. Across the continent, smartphone penetration, internet access and demand for digital payment platforms continues to rise. And at the heart of this transformation is Safaricom. Safaricom is most famous for its mobile money ecosystem, M-PESA, and has evolved beyond that of a traditional telecom operator. Today it is one of Africa’s most influential technology companies, providing digital payments, business services, internet connectivity and financial products to millions of customers. Vodafone’s latest trading update also showed double-digit service revenue growth in Africa, proving that the region is becoming one of the company’s most important growth markets.

Why Investors Are Paying Attention

Markets had mostly priced in an increase in Vodafone’s earnings guidance since it had taken control of Safaricom. The upgraded outlook was generally in line with analyst expectations, which has helped to raise confidence that the acquisition will deliver immediate financial benefits. Investors see opportunities for more than just higher earnings over the long term. Safaricom is growing its digital financial services footprint and extending its presence outside Kenya with investments in Ethiopia, one of Africa’s largest emerging telecom markets. If successful, these expansion efforts could unleash another wave of revenue growth for Vodafone in the coming years.

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What This Means for Africa’s Telecom Industry

Vodafone’s upgraded guidance is a wider signal to the world of investors: the telecommunications sector in Africa is becoming more attractive. This optimism is founded on several trends:

• Increasing demand for mobile internet
• Mobile money services growing fast
• Digitally-connected young populations
• Growing business use of cloud and digital services

The race is on and telecom companies are likely to pour more money into 5G infrastructure, digital banking, artificial intelligence and enterprise connectivity. For consumers, that could mean faster internet, better mobile services and more access to digital financial products.

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