Vodacom Targeting Angola, Uganda, Ethiopia

South Africa-based mobile group Vodacom has confirmed that it is ready to expand its operational footprint across Africa, and is on the hunt for small-scale acquisitions. Vodacom, which is majority owned by the UK’s Vodafone Group, currently operates in five countries in sub-Saharan Africa, and chief executive Pieter Uys told Dow Jones Newswires that the company is looking to make a series of acquisitions in the USD100 million range.

Uys noted that Vodacom will focus on countries that offer a stable political environment, have densely populated cities and offer room for growth. As such, the CEO pinpointed Angola, Ethiopia and Uganda as likely targets. Announcing its FY11 results earlier this week, Vodacom noted that the financial year ended March was the first time that its operations outside South Africa have contributed positive cash flow. As a result, Uys told Dow Jones: ‘We feel more comfortable that we have the recipe to be successful outside South Africa’.


In March 2012 Sifiso Dabengwa, CEO of Vodacom’s chief rival MTN Group confirmed that his company was interested in lining up so-called ‘bolt-on’ deals in new African markets, once again naming Angola and Ethiopia. In the former, a third mobile licence has been expected for some time, with state-run incumbent Angola Telecom keen to secure an international partner to assist with its entrance to the sector. Meanwhile, Ethiopia is one of the few countries in Africa still operating a monopoly in the wireless sector, with state-run Ethio Telecom the sole licensee.

Elsewhere, Uganda is overcrowded by comparison, boasting six active wireless operators, with another, Sure Telecom Uganda, waiting in the wings. Of the country’s cellcos, Uganda Telecom Ltd and Warid Telecom Uganda are plausible targets, with the ownership of both companies coming under scrutiny in recent years.

Vodacom Announces 43.2Mbps HSPA+ Deployment

Mobile operator Vodacom South Africa has confirmed that it has exceeded 1,000 active 43.2Mbps HSPA+ sites on its network, the South African media reports.


Although the deployment has taken place over time, Vodacom stressed that it did not want to publicise the improved speeds until they had achieved ‘significant’ HSPA+ coverage.


CEO Pieter Uys commented: ‘We have actually had the technology up and running for some time, but we wanted to have a critical mass of at least 1,000 base stations before flipping the switch to allow consumers access at up to double the speed. We wanted to make sure that we had the service available in more than just one city’.

According to MyBroadband.co.za Vodacom currently has over 4,300 3G base stations in South Africa, of which 2,650 are 21Mbps enabled, with the remainder supporting transmission speeds of 14.4Mbps.


Further, Vodacom chief technical officer Andries Delport has disclosed that Vodacom plans to have a total of 2,000 HSPA+ towers upgraded to support transmission speeds of 43.2Mbps by May 2011. Vodacom CEO Pieter Uys had previously indicated that Vodacom intends to roll out an additional 1,000 3G base stations during 2011. Despite the increase in peak speeds Vodacom has said that it is focusing on increasing the average performance of its overall network, and will connect 2,000 mobile sites to fibre by the end of the current financial year. 

However, Delport tempered the announcement by conceding that speeds of up to 43.2Mbps are strictly theoretical, and depend on how many people are using the towers, and their proximity to the base stations; in a live HSPA+ test staged on Friday Vodacom demonstrated peak download speeds of around 37Mbps. There will be no increase in costs to existing subscribers, and compatible 43.2Mbps HSPA+ dongles are now available in Vodacom retail stores. Although precise rollout details are unknown, it is believed that most major metropolitan areas will be covered from the outset. 


Vodacom’s announcement came just days before rival Cell C was set to officially inaugurate its own 43.2Mbps HSPA+ network, in Port Elizabeth, on 19 April.

WACS Arrives Near Cape Town

Submarine communications cable the West Africa Cable System (WACS) has landed in Yzerfontein, near Cape Town. The 14,000km cable, which is expected to dock at 14 different landing points along the Western coast of Africa, before linking to the Canary Islands, Portugal and the UK, is set to commence commercial service in 1Q12. The total capacity of the system is 5.12Tbps, and at least 500Gbps will be lit at launch.

Investors in the WACS cable include South African telcos MTN, Vodacom, Telkom South Africa, Broadband Infraco and Neotel.


Angus Hay, head of strategic business development at Neotel, commented: ‘This is the dawn of a new era in the South African telecommunications industry. 


Since the launch of SEACOM and later EASSy, international bandwidth to South Africa has increased. The landing of WACS sets Neotel ahead of its competitors, as it is the only telecommunications operator that has direct access to all five undersea cables landing in South Africa: WACS, SEACOM, EASSy, SAT-3 and SAFE. 


For Neotel this means that our customers are highly unlikely to experience downtime since the traffic can be moved from one cable to another in case of any cable failure. The level of redundancy, reliability and security will now increase’.

Vodacom Could Re-brand To Vodafone Colours

According to Times Live, South Africa-based telecoms group Vodacom is poised to unveil its new corporate colours at the Orlando Stadium in Soweto on Friday night.

Although Vodacom has yet to confirm the details, mounting press speculation indicates that the firm will be re-branded in line with the red and white colour scheme used by parent company Vodafone, which secured a controlling stake in Vodacom in May 2009.

Vodacom, which also has operations in Mozambique, Tanzania, Lesotho and the Democratic Republic of the Congo (DRC), has reportedly budgeted a sum of ZAR200 million (USD29 million) for the re-branding exercise. However, Vodacom is expected to retain its name after the transition, despite Vodafone's global strategy to re-brand all operations in which it has a controlling stake. 

Vodafone, which holds a 65% stake in Vodacom, intends to increase its connection to Vodacom, by rotating executives among its foreign units and allowing Vodacom to leverage its global supply chain as well as introducing in new services pioneered by Vodafone elsewhere.

Vodacom Tz Signs Management Deal With NSN

Vodacom Tanzania has inked a five-year managed services deal with Nokia Siemens Networks (NSN). 


The vendor will take over complete responsibility for the existing Network Management Centre and operations across the radio, transmission and core networks, as well as network planning and optimisation. Under the terms of the deal, 124 Vodacom Tanzania employees will transfer to NSN. No financial details have been disclosed. 


Vodacom Tanzania ended 2010 with just over seven million active subscribers, giving it a market share of 36%.

Telecom Namibia Ready to Join WACS

Telecom Namibia says it is ‘ready’ to connect the country to the West African Cable System (WACS), a consortium high speed submarine system linking Africa to Europe, which it hopes will lead to higher-bandwidth, cheaper data and voice services for all end-users. The USD600 million fibre-optic cable has reached the shores of Namibia, whilst Telecom has already deployed infrastructure to link its landing station at Swakopmund to its domestic network and expects that commercial services could be launched by the second quarter of this year, reports local newspaper New Era. The project will give Namibia its first direct access to global submarine cable networks.

The WACS consortium consists of twelve companies: Angola Cables, Broadband Infraco, Cable & Wireless, Congo Telecom, MTN, Office Congolais des Postes et Telecommunications, Portugal Telecom/Cabo Verde Telecom, Tata Communications/Neotel, Telecom Namibia, Telkom SA, Togo Telecom and Vodacom. The main contractor is Alcatel-Lucent.

Domestic Market Boosts Vodacom Revenues Up 3.9%

South Africa-based Vodacom Group has reported consolidated revenues of ZAR16.03 billion (USD2.24 billion) for the three months ended 31 December 2010. 


This figure represents an increase of 3.9% year-on-year. Vodacom’s domestic unit, Vodacom South Africa accounted for ZAR14.07 billion in sales, or 87.7% of the group’s total quarterly revenues. 


The telecoms firm has yet to release figures for EBITDA or net profit. Of Vodacom South Africa’s revenues, mobile voice traffic was responsible for the lion’s share of the takings, generating ZAR7.43 billion, whilst mobile interconnection fees contributed ZAR1.78 billion, mobile data ZAR1.75 billion and mobile messaging ZAR644 million. Data exhibited the largest increase year-on-year, growing 50.5%. 

In operational terms, Vodacom South Africa remains the firm’s largest unit by subscribers, although its customer base dropped 6.6% year-on-year, to 25.3 million. However, any losses have been offset by the company’s enlarged post-paid subscriber base which grew 14.8% year-on-year. 


Elsewhere, Vodacom units in Tanzania, Democratic Republic of Congo, Mozambique and Lesotho all increased their subscriber bases in the twelve months ended 31 December. Lesotho contributed the largest proportion of growth, increasing its customer base 28.6% to 823,000. Tanzania grew its subscriber base 26%, to end the year with 8.7 million subscribers, whilst Mozambique weighed in with 2.9 million customers (up 27.7%) and Democratic Republic of Congo 3.8 million subscribers (up 9.2%). 


Vodacom Group ended the calendar year with a consolidated wireless subscriber base of 41.6 million. 


Vodacom CEO Pieter Uys commented: ‘Our strategy of focusing on operational delivery and offering increased value to customers has paid off with group customers increasing by more than two million to 41.6 million. 


In South Africa, the data business was a star performer, with growth in mobile connect cards and smartphones driving a 33.8% increase in overall data revenue. The international operations also continued to respond well to management actions with service revenue growth of 13.2%’.

Mozambique Cellcos Plan to Use Post Office For SIM Registration

Mozambique's two mobile phone operators, mCel and Vodacom Mozambique, have reportedly entered into negotiations with the Mozambique Post Office to use its facilities to assist with the ongoing statutory registration of pre-paid SIM cards.

In an interview with Maputo daily newspaper Noticias, Luis Rigo, chairperson of the Post Office board confirmed that his company has been approached by both operators for the use of its services; Post Offices exist in most of the country's 128 districts.

However, although the Post Office has a far larger network than either mCel or Vodacom, it is not present in every district, and not all of its branches are equipped to carry out the government-endorsed registration process. Rigo confirmed that the Post Office was currently investigating how many of its branches possess the minimum requirements to carry out the registration, namely: electricity, a photocopier and paper.

Last week independent newspaper Mediafax reported a thriving black market trade in outlying internet cafes charging anxious mobile phone subscribers USD1 to register their details online; the majority of the population currently live on less than USD1 per day.

Users of pre-paid mobile phones in Mozambique have until 15 November to register their SIM cards, with those users who fail to meet the deadline having their SIM cards ‘blocked’. The push for SIM card registration comes in the wake of widespread riots in Maputo and Matola in September over a 30% rise in bread prices; the riots were reportedly co-ordinated by a widespread text message campaign.

Mozambique reported a total of 5.56 million subscribers at end-June 2010. Neither mCel or Vodacom have revealed how many subscribers they have managed to register thus far.

Operators To Foot Bill of SIM Registration in Mozambique

The compulsory registration of SIM cards in Mozambique must be funded by Mozambique's two mobile operators, mCel and Vodacom Mozambique, regulatory body the Instituto Nacional das Comunicacoes (INCM) has declared.

In a local media briefing, Francisco Chate, director of posts and telecommunications at the INCM insisted that its recently announced SIM card registration scheme must be free of charge to subscribers, with Chate warning the two cellcos that they must not pass on any associated costs to their respective subscribers.

Doubts have been raised over the logistics of Mozambique’s SIM card registration process, as both operators have few retail outlets and depend on itinerant vendors to sell SIM cards around the country.

The INCM has already stipulated that vendors are prohibited from carrying out the registration process, which will reportedly require valid identification, signatures and fingerprinting.

Neither mCel nor Vodacom have yet to advertise the imminent SIM registration online or in print. When questioned by reporters regarding the feasibility of registering 5.6 million SIM cards by 15 November, Chate admitted: ‘It is a very tight schedule.’

Mozambique Urges Firms to Share Infrastructure

In an interview with independent daily O Pais, Mozambique's Minister of Transport and Communications, Paulo Zucula, has urged the country's two mobile phone operators, mCel and Vodacom, to share their mobile phone masts in order to reduce costs, protect the landscape and ultimately enable increased coverage in remote areas.

Zucula commented: ‘The fact that each operator has its own infrastructure demands huge investment, which takes a long time to carry out. Furthermore, if we don't adopt this measure, we shall fill the country with redundant, unnecessary masts. It's a question of rationalisation’.

He indicated that both Vodacom and M-Cell are in favour of the idea, whilst conceding that financial disputes may yet cause a stumbling block: ‘I think that they're in favour. Sharing will allow better use to be made of their infrastructures, and so I doubt that they'll reject it. Since it's a business, problems could arise, but I think they agree with the principle’. He added that sharing infrastructures would make it easier for new operators to enter the market.

Three out of 22 interested parties were shortlisted to become Mozambique’s third mobile phone operator in July 2010. The three in question are TMN (the cellular unit of Portugal Telecom), UNI-Telecom (a joint venture between Angolan cellco Unitel and Mozambique’s Energy Capital) and a Vietnam-backed bidder named Movitel. The winner is expected to be announced in November. Mozambique is currently home to mCel with an estimated four million customers in June 2010 and Vodacom with 1.57 million at the same date. Wireless penetration stands at 25%, leaving plenty of room for growth.

Cell C HSPA+ Tests Yielding "Positive Results"

Cell C, South Africa’s third largest cellco by subscribers has announced that tests for its new HSPA+ network are currently underway in six cities, and the results are ‘very promising’. More than 1,300 base stations, located in six major cities, have already been converted to HSPA+ using the 900MHz frequency band, and CEO Kelly Reichelt has promised that Cell C will launch its new network on a city-by-city basis, rectifying any potential problem areas as it goes along. Cell C will eventually upgrade 5,200 bases stations to the new platform. Cell C expects to cover 34% of the South African population with its HSPA+ network by end-2010 and aims for 67% population coverage by mid-2011.

Although MTN has already launched a commercial 21Mbps HSPA+ service, Cell C aims to be the first South African operator to rollout HSPA+ across its entire network. It took Vodacom almost five years to achieve 50% 3G population coverage using the 2100MHz band, whilst Cell C’s strategy to use the 900MHz frequency should make it easier for the cellco to reach rural customers. According to Reichelt a single HSPA+ 900MHz transmitter can cover a three to five times larger area than those using the higher band.

Vodacom Launches Mobile TV Service

South African cellular operator Vodacom has teamed up with On Demand Group to launch mobile TV subscription on-demand services to its 3G user base.

The companies claim that the ‘TV:On Demand’ service, including TV series, music videos and other content, is the first of its kind available in Africa, allowing mobile users to watch what they want on demand, at any time. A monthly subscription costs ZAR75 (USD10.33), or a week’s access can be obtained for ZAR20.

MTN to Empower Blacks Through Shares

MTN South Africa has announced that it will make 4% of its shares available to black South Africans, in the largest empowerment transaction in the telecoms sector to date.

The stake, which is worth an estimated ZAR8.3 billion (USD1.1 billion), sees MTN follow in the footsteps of rival Vodacom, which sold 6.25% of its operation for ZAR7.5 billion in a similar deal in July 2008. MTN will sell stakes in the business through the National Empowerment Fund’s Asonge scheme. The company will also offer 0.1% of its shares to black employees – excluding management and directors - who have suffered from apartheid discrimination in the past. They will not be required to make an equity contribution.

The transaction, which is dubbed MTN Zakhele, will be offered to the public at the end of August 2010. It will be open for a six-year period, with investors locked in for the first three years; at the end of the three years they will be allowed to sell, but only to other BEE investors. Investors will have to put in a minimum of ZAR2000, for 100 shares. An MTN statement said that there will be no cap per individual investing in the MTN Zakhele empowerment scheme. All valid share applications will be considered, and a bottom-up allocation process will be followed should the scheme be oversubscribed.

The deal will cost MTN in the region of USD301.43 million, which includes USD129.96 million in vendor financing, and USD20.01 million to cover the cost of the employee share ownership programme. Black investors will indirectly own 29% of MTN South Africa. CEO Phuthuma Nhleko said that black economic empowerment (BEE) was ‘integral to the ethos of MTN’.

World Cup: It's Been A Boom For South African Firms

With the World Cup done and dusted for another four years, South African mobile operators have reported booming traffic volumes during the 2010 tournament. Vodacom enjoyed a 40% increase in SMS traffic over the month, with 600 million text messages sent.

Andries Delport, Vodacom’s executive director of network and information technology, claimed: ‘In some cases, the traffic on a single base station increased by more than 500% compared to just prior to the start of the tournament’.

Delport admitted that Vodacom committed more than 15,000 man-hours to operational support, in order to keep the company’s network running efficiently, including a dedicated network operations centre.

Elsewhere, Cell C saw its traffic boosted to three times the normal levels on in-bound roaming calls. Cell C CEO Lars Reichelt announced that traffic levels were 70% higher than for the same period last year, pinpointing the periods before and after the matches as particularly busy.

Meanwhile, Cell C’s SMS traffic increased by more than 15% during the tournament. MTN - Africa’s first ever global World Cup sponsor - has not been able to provide any figures as of yet, although it is expecting to show a similar increase to its rivals. During the tournament, MTN sold 600,000 specialised tourist SIM cards, although it has not yet confirmed how many of these SIM cards were activated.

Vodacom To Launch ADSL Service

South African mobile operator Vodacom has confirmed that it will be launching a consumer based ADSL service to complement its current wireless and business offerings.

Vodacom, which is South Africa’s largest cellco, has been actively working towards entering the fixed broadband market since 2007 - initially as a reseller - but also with the intention of providing services using its own bandwidth.

Three Shortlisted For Mozambique's Third Licence

Three out of 22 interested parties have been shortlisted to become Mozambique's third mobile phone operator, the National Institute of Communications (INCM) has announced. The three in question are TMN (the cellular unit of Portugal Telecom), UNI-Telecom (a joint venture between Angolan cellco Unitel and Mozambique's Energy Capital) and a Vietnam-backed bidder named Movitel.

The ownership of the Vietnamese company was not reported. However, Vietnamese military-run GSM operator Viettel previously announced plans to seek investment opportunities in other developing countries including Mozambique, following its recent takeover of the Haitian operator Teleco.

INCM director Americo Muchanga commented: ‘The three have presented required documents. Technical and financial proposals will be evaluated over the next two months after which we will announce the winning bid’.

Mozambique is currently home to Mcel with an estimated 3.7 million customers in March 2010 and Vodacom with 1.49 million at the same date. Wireless penetration stands at 23.8%, leaving plenty of room for growth.

22 Eye Mozambique's 3rd Operator Licence

22 Mozambican and foreign companies have acquired contract documents for the tender of the country’s third mobile telephone licence, the director-general of Mozambique's National Communications Institute (INCM) has announced.

A year ago, the government approved the introduction of a third wireless operator to ‘meet demand’. The government now has 60 days to evaluate the proposals and select a winning bid. The successful applicant will be permitted to launch operations within 30 days of licensing, with an obligation to enter the market within a year.

Under the terms of the tender, the Ministry of Transport and Telecommunications (MTT) has set a USD25 million minimum bid for the 15-year licence. The regulations also require bidders to operate one or more networks with at least two million customers and to have a local partner. The government has said it will place more value on a bidder’s technical proposal, than its financial one.

Mozambique is home to two wireless network operators: Mcel with an estimated 3.8 million customers at the end of 2009 and Vodacom with 1.63 million at the same date. Wireless penetration stood at 23.8% in March 2010, leaving plenty of room for growth.

Telkom Annual Results Reveals Fall In Profits

Telkom South Africa said fiscal 2010 full year profit fell because of increased competition from mobile operators and lower price increases. Revenue for the twelve months ended 31 March 2010 rose 0.7% to ZAR37.029 billion (USD4.887 billion), while EBITDA fell 15.2% from ZAR11.574 billion to ZAR9.809 billion.

The earnings measure excludes a profit from the sale of its 50% stake in Vodacom Group and ZAR5.2 billion (USD698 million) write-down on its Nigerian unit. Low tariff increases, greater competition in its domestic market and Nigeria, coupled with high, ageing handset stocks and above-inflation wage increases, cut margins.

Voice traffic volumes fell 9.3%. Capital expenditure fell by 44.2% to ZAR5.4 billion during the year.

Vodacm Launches LTE Trials

Vodacom has launched a live Long Term Evolution (LTE) trial network in Midrand, the first in Africa.

The South African company has fully integrated the 4G network with its existing 3G/3.5G network and uses the same 2100MHz spectrum. The trial network has a theoretical downlink speed of 150Mbps and a theoretical uplink speed of 100Mbps.

Cel C Tests HSPA+

Cell C is reported to have started testing its HSPA+ network, capable of offering download speeds of up to 21Mbps, according to local press reports. Cell C announced in late 2009 that it will be investing around ZAR5 billion (USD649 million) to upgrade its network infrastructure, something which will allow it to compete more effectively with Vodacom and MTN in the mobile broadband market.