Vodafone 2026 Annual Report

Vodafone Group Plc Annual Report 2026

Strategic report

Governance

Financials

Other information

Empowering People continued

Smartphone penetration in Africa The cost of smartphones remain a key barrier for people to get connected. Smartphone ownership is lowest in emerging markets. Access to 4G smartphones and smart feature phones can provide customers with the necessary technology to connect to the digital world, offering the opportunity for digital inclusion. Given that smartphones are increasingly the main gateway to digital services, and that they remain inaccessible to a large portion of the population (entry-level smartphones in sub-Saharan Africa cost 99% of the average monthly income for the poorest 20% 1 ), we recognise the urgent need to make smartphones more accessible. During the year, approximately 65% of Vodacom Group’s customers have access to a smartphone. Strategy We seek to make 4G smartphones more accessible through several key interventions to reach Vodacom’s Vision 2030 strategy target of reaching above 75% smartphone penetration across our markets. Low-cost sourcing enables us to deliver affordable 4G entry smartphones through partnerships with second-tier Original Equipment Manufacturers (‘OEMs’), while reducing costs via localised production and tailored device customisation. The Open Market investment leverages distribution channels beyond operator-driven sales to capture new customer segments. We are also pioneering new financing options, including prepaid handset financing.

Data Democratisation in Africa For many of our lowest income customers, the cost of data is a barrier to accessing the internet. This is apparent in Africa which has the least affordable data in relation to income. Strategy We are focused on reducing the costs of data to better support our customers, particularly for low income groups. In order to make data accessible for marginalised groups and more affordable by offering value for money propositions based on consumer usage and spend, we have two key initiatives – ConnectU and Just4You (‘J4U’). Our vision for ConnectU is to close the digital divide and empower customers by democratising access to relevant information through a zero-rated platform. ConnectU provides free access to essential services and resources including education, health services and social networks. J4U makes product recommendations that are based on consumer behaviours and preferences to help to lower their costs. The propositions are personalised at a customer and geographic level. For example, we identify J4U Towns using census data to identify towns with low- to middle- income populations. Populations of J4U Towns are offered customised lower-cost voice and data packages. We offer these solutions at a fair price point in line with local price floor regulations, which protect both the consumer and the sector. These allow for investment to ensure the sustainability of the network infrastructure.

This year ConnectU has expanded into three additional markets and is now live in five markets (South Africa, Mozambique, Lesotho, DRC and Tanzania.) Through J4U, we succeeded in holding strong positions across South Africa, Tanzania, Lesotho and Egypt and met our FY26 revenue and penetration goals. In the DRC and Mozambique, we undertook a considerable amount of groundwork (which includes network optimisation, pricing corrections and skills updates) to scale up customer adoption of J4U bundles. We have achieved our targets in the DRC, however further progress is required to meet our targets in Mozambique. Data democratisation in Africa 2026 2025 Just4You penetration (%) 39 45 Just4You revenue contribution (%) 35 37 ConnectU users (millions) 4.2 3.8 Looking forward We plan to accelerate the development of content for our ConnectU platform across education, health, women empowerment, careers, and other high impact categories, while simultaneously modernising the platform’s user experience and user interface to deliver a seamless, intuitive navigation experience that enhances user engagement and improves overall accessibility. Through J4U, we are focusing on maintaining the level of maturity and growing our stronghold across most markets. However, we will continue to find ways to increase our reach in the DRC and Mozambique. In addition to these initiatives we are working to improve simplicity and transparency with competitive headline price points.

This year In support of driving smartphone ownership, Vodacom continued to offer contracts of extended duration (36 months) to make devices more affordable by spreading costs over a longer period. Together, our actions to drive smartphone penetration contributed an additional 10 million smartphones during the year. We met our overall Vodacom Group target and have had a particularly strong focus on driving smartphone uptake in rural areas. Furthermore, we have now launched pre-paid device financing in all our African markets, which is a strategic imperative for driving growth in smartphone adoption across our markets. We have successfully leveraged our scale to secure Group deals, sourcing over 3.1 million entry-level 4G devices by year end. Through partnerships with second-tier OEMs and local assembly initiatives in Egypt and South Africa, we introduced affordable models ranging from $20 to $42, tailored with features like WhatsApp, Facebook, YouTube, and long-lasting batteries. We’ve made strong headway in expanding our Open Market footprint to extend our reach, with active rollouts across markets. Smartphone penetration in Africa 2026 (%) 2025 (%) Smartphone penetration 65 62 Looking forward In line with Vision 2030, we will continue to increase smartphone penetration and our smartphone base. We will have a strong focus on building partnerships with third parties to scale device financing, and we will continue to pursue opportunities for low-cost sourcing and local assembly, as well as, investing in Open Market. These initiatives are designed to sustain growth and broaden market impact.

Notes: 1. GSMA, 2024.