If you invested a R1,000 in Vodacom, MTN, and Telkom 10 years ago, here is how much you will have now

A R1,000 investment in all of South Africa’s biggest telecoms companies ten years ago would be worth substantially less today. This is highly uncommon as share price growth is generally expected.

MyBroadband looked at how the share prices of Vodacom, MTN, Telkom, and Blue Label changed between 14 May 2014 and 14 May 2024.

We found that two of the companies’ share prices had declined by more than half their previous value.

Vodacom’s share price closed at R89.03 on 14 May 2024. Ten years ago, the share traded at R129.67, a drop of 31.34%.

Over the past ten years, the peak Vodacom share price was over R184 in August 2017.

An investor who sold their R1,000’s worth of shares at this time would have gotten around R1,840 for them — a net return of R840.

If they only sold their shares ten years after buying, they would have lost around R313.

MTN’s share price decline

The share price of Vodacom’s primary rival — MTN — has experienced an even bigger decline.

At the close of the market on Wednesday, 14 May 2014, MTN traded at R221.50. Ten years later, the share price declined to R84.82 – a 61.71% loss.

That means R1,000 invested in MTN in May 2014 would only be worth around R383 today.

It should be noted that this big drop followed an MTN share price rally in 2014, when the operator’s stock reached an all-time high of over R268.

Since 2015, MTN has faced significant headwinds in its biggest market, Nigeria, whose communications regulator and tax authority have repeatedly spooked investors with egregious fines and tax demands.

While these have been negotiated downwards, MTN has failed to shake investor sentiment about Nigeria’s generally hostile operating environment.

In South Africa, load-shedding and poor economic growth have stunted revenue and customer growth, which have also impacted Vodacom.

Telkom’s share price is also lower

Between14 May 2014 and 14 May 2024, Telkom’s share price slumped from R39.40 to R24.93 — a 36.73% drop.

During this period, Telkom invested significantly in becoming a bigger player in the mobile network space, a move that cost it its fixed-line dominance.

While it shot past Cell C to become South Africa’s third-biggest mobile network and enjoyed a peak share price of over R95, it soon became evident that the potential growth in this segment had slowed.

Simply put, Telkom’s mobile segment growth was insufficient to keep investors confident in its future while its fixed-line consumer and enterprise businesses declined.

Telkom CEO Serame Taukobong recently told MyBroadband the company would refocus on fixed infrastructure.

“We have been more explicit in identifying ourselves as an InfraCo due to our substantial infrastructure assets anchored by over 170,000km of fibre as part of our long-distance, metro and access networks,” Taukobong said.

Blue Label, which owns Cell C

The last company with a major interest in the mobile network industry is Blue Label, Cell C’s biggest shareholder.

Over the past decade, its share price has more than halved from R9.60 to R4.30. Cell C’s financial crisis has weighed heavily on Blue Label’s share price.

It forced the company to take drastic measures — including retrenching a large chunk of Cell C’s workforce, decommissioning its physical radio access network, and carrying out a complex recapitalisation.

Share price performance

The table below shows the share price changes of South Africa’s four big telecoms companies over the past decade.