In South Africa lower interest rates, inflation and fuel prices have provided some relief to consumers. However, the deterioration in global macroeconomic conditions is expected to deepen further the negative impact on the business segment as well as result in increased unemployment. As customers continue to contain their spending, the Group will seek to offer them greater value. To further mitigate the pressure on top-line growth and preserve margins, greater operational efficiencies will be driven across the business.

Trading conditions are expected to remain challenging for the international operations, with economic weakness persisting particularly in the DRC and aggressive competition in all markets. Vodacom will ensure it remains competitive and efficient to mitigate the pressures.

Vodacom Group will continue to invest to position the Group for growth in the sub-Saharan African communications markets, which remain among the fastest growing in the world. Vodacom Group’s capital expenditure is expected to be R8.0 billion for the year ended 31 March 2010. The Group’s strong cash flow and balance sheet will provide the flexibility both to invest prudently in strategic growth opportunities and to return cash to shareholders on a sustainable basis.

For and on behalf of the board

19 May 2009
Midrand