In a strategic partnership with Safaricom, Africa’s leading communications company, Vodacom may be planning an entry into Ethiopia.
“The opportunities are not that clear, yet there are indications that Ethiopia will issue additional licences, and potentially take in a strategic partner for the existing (government-owned) Ethio Telecom, but there’s nothing yet in terms of actual processes and so on,” Shameel Joosub, CEO of Vodacom Group Limited explained.
Vodacom which is heavily reliant on South Africa’s market has been looking to diversify and expand its footprints for years. In 2013, Vodacom opened an office in Ethiopia securing a value-added service licence to provide all services except standard voice calls.
South Africa’s economy suffered a setback recently and plunged into recession; this has made growth for network operators in the country difficult. Vodacom’s total revenue in South Africa rose by 4.3% to 35.3 billion rands in the first half of the year down till September, from 7.7% recorded a year before. However, data revenue growth halved to 7.5%.
Slow growth in data revenue factored a decline in Vodacom’s share price to 120.30 rands. The decline according to Mergence Investment Managers portfolio manager Peter Takaendesa is the biggest one day drop since September 2017.
Vodacom CEO Shameel Joosub said the slowdown in data revenue growth is likely to be “a temporary dip” and the rate “should accelerate back to double-digit growth over time.”
“Overall, it’s still a strong set of results in South Africa. The subdued data growth I think was more a deliberate move on our part to reprice and also deal with the out-of-bundle issue,” Joosub added.
In addition to South Africa, Vodacom also operates in Mozambique, Lesotho, Democratic Republic of Congo, Tanzania and Kenya.
In August 2018, Vodacom Group launched the first commercial 5G service in Africa. The service is operational in Lesotho, making it the first African country to enjoy the service on the continent.
The communications giant revealed that the launch was fast-tracked due to the availability of the 3.5GHz spectrum band in Lesotho. However, the company also said it intends to replicate the same standards-based 5G network capabilities in South Africa once the required spectrum, which will make it efficient, is assigned by the country’s telecommunications agency.
