Vodacom, South Africa's largest mobile network provider, announced in its FY2025 annual report that "unstable economic conditions" and "cyber threats" are the biggest risks to its business and revenue.
The company has placed these two threats at the top of its "risk heat map," categorizing them as high-impact and rapid-impact threats that could directly impact revenue and profitability.
Highlights of the report:
Vodacom reported a 10.9% increase in annual revenue to R152 billion (excluding currency fluctuations), with operating profit growing by 7.8%.
However, the company emphasized that economic turbulence, as well as changing trade policies and geopolitical tensions, pose a significant risk to consumer and business confidence and could affect the exchange rate, interest rates, and inflation in less than 6 months.
Similar warnings from the Reserve Bank:
Vodacom's warning is in line with the South African Reserve Bank's (SARB) first Financial Stability Report 2025, which warned that a single cyber incident could undermine the financial stability of the entire country.
The report also noted that South Africa's weak economic growth is facing additional pressure from trade wars, conflicts in the Middle East, and the Russian-Ukrainian war.
Global and African repercussions:
The World Bank has warned that South Africa's economic growth could fall by 1.1 percentage points as a result of the global trade war, while sub-Saharan Africa's economy could see a 0.4-point decline.
However, South Africa's economy grew by 0.1%, beating expectations, while the IMF expects sub-Saharan Africa's GDP to grow by 3.6% in 2024.
Growing cyber threats:
Vodacom described cyber threats as the second most serious risk, noting that cyber attacks can disrupt services or compromise confidential data, which can lead to lost revenue, reputational damage, and increased costs due to fraud or extortion.
Coping strategies:
In response to the economic challenges, the company explained that it is constantly reworking its offerings, closely monitoring capital expenditures, and activating contingency plans.
In the cyber space, Vodacom said it is strengthening its security framework and developing sustainable programs to attract and train scarce cybersecurity talent, as well as upskilling the existing workforce.
The warning comes at a time of increasing interlocking threats, both economic and technical, that threaten not only businesses but the overall stability of markets in South Africa and the region.
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