Vodacom revises earnings forecast downwards following Please Call Me settlement

Vodacom has revised its earnings forecast downwards by around 17%, due to a “one-off event”, hours after it reported that a settlement had been reached in the Please Call Me court action.

Vodacom said the matter was settled by the parties out of court; the parties were glad that finality had been reached, and Vodacom did not disclose the rand amount of the settlement agreement, even though Business Report did question the telecom operator in this regard.

As part of the settlement, the group said a notice was sent to the Supreme Court of Appeal, withdrawing Vodacom's appeal. Additionally, a notice was sent to the High Court to abandon a judgement on February 8, 2022.

Vodacom said the settlement had been accounted for in the group's interim results for the six-month period ended September 30, 2025, subsequent to the publication of a trading statement on October 31, 2025.

In this trading statement, HEPS was predicted to increase by between 40% and 45% compared to the HEPS of 353 cents reported for the prior corresponding period. This translates to an HEPS range of 494 cents to 512 cents.

In an “updated” trading statement released Thursday morning, HEPS was predicted to only rise by between 30% and 40% compared to the 353 cents of the previous period. The cost of this “one-off event” to the group, approximately, thus amounts to 23.62 cents a share, or around R435 million in total headline earnings for the 2024 reporting period.

Gryphon Asset Management portfolio manager Kasparus Treurnicht said the share price appeared “fully valued” but the reaction to the announcement appeared "muted"  considering the conclusion of the court case that might have cost Vodacom many billions of rands had the court case gone against it, that some of Vodacom’s investments in Africa should start contributing more to its bottom line, and that the share price had already risen well over the past year.

Vodacom’s share price increased 1.05% to R137.20 on Thursday, a price that was 32.3% higher than a year ago.

A former Vodacom junior employee, Nkosana Makate, and Vodacom had been fighting over the Please Call Me idea for 18 years. Makate claimed to have invented the Please Call Me service, which he initially believed should amount to almost R10 billion, but Vodacom had argued that fair compensation for his contribution would have been around R50 million.

Makate claimed he was promised compensation, and he launched legal action in 2008 when there was no follow-through. The Constitutional Court had previously ordered Vodacom to pay Makate for his idea, and at the time Vodacom increased its offer to R47m from R10m, which Makate rejected. A second round of legal actions culminated in another Constitutional Court judgement ordering the matter to rerun in the Supreme Court of Appeal.

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