Telecommunications company Vodafon (LSE: VOD) has often seemed unloved by stock investors in recent years. The tide certainly turned in 2025, however, with Vodafone’s share price rising by 40%.

This is still 22% below the level of five years ago (and over 80% below the 2000 level!).

However, this year’s powerful dynamics did not come out of nowhere. I think there are a few clear reasons behind this. So should I invest now in the hope that the Vodafone share price will continue to rise in the coming year and beyond?

Dividend growth returned, but from a lower base

Vodafone cheered investors this year by announcing its first dividend boost in years. However, this comes after a painful dividend cut last year. This has happened many times over the last few decades.

So what does the company’s dividend policy signal to investors? On a positive note, a growing dividend and noticeable financial discipline can be seen as positive factors for the stock. The current dividend yield of 4.2% is significantly higher than the interest rate FTSE100 average.

However, over the longer term, Vodafone’s dividend per share is now a shadow of what it once was. This highlights the hard economic situation of the telecommunications industry, where high licensing and infrastructure costs often negatively impact operating profits.

Mobile money continues to be a powerful story

This year we saw Airtel Africa the share price increased by 179%. Much of the excitement surrounding this participation stems from the company’s Africa-focused digital payments business.

But Airtel Africa is not the only FTSE 100 company with a immense and growing mobile money business on the continent. Vodafone has a immense presence here and a sizeable customer base in many countries where it also wants to expand its mobile payments business.

In the first half of this year, Vodafone served 94 million financial services customers in Africa. Weakening exchange rates resulted in an boost in revenues when converted from local accounting currencies to euro (Vodafone’s financial reporting currency). I see this as an ongoing risk for Vodafone and we have seen this pose a challenge for Airtel Africa’s operations as well.

In euro terms, Vodafone’s revenues in Africa in the first half of the year increased by 7% year-on-year. I actually find it unimpressive given the scale of the opportunity, the growth opportunities in the market and the competitive advantages Vodafone should have helping it exploit.

If the company manages to do this and proves that its mobile payments business has significant potential for continued growth, I think it could drive Vodafone’s share price higher in 2026.

Mixed bag

As an investor, I still have mixed thoughts on Vodafone. I like its powerful position in many European and African markets, its proven potential to generate cash and the scope of opportunities that mobile money offers.

However, the company’s net debt increased in the first half and its long-term dividend performance has been disappointing.

Still, the share price has tailwinds and I see some reasons for continued optimism. The company has a number of significant strengths that I believe could potentially justify a higher valuation. I believe this is a stock that investors should consider.