Vodacom plans to broaden its horizons

Zweli Mokgata

Zweli Mokgata

Cellphone giant Vodacom will be spending R2,5billion over the next five years to bring a wider range of services to its customers.

The company, which has a South African market share of about 55,6percent out of 24,3million cellphone users, is planning to diversify from pure voice solutions.

Vodacom has established a new division called Vodacom Business to provide end-to-end converged information and communication solutions and services for the corporate and small-and-medium-enterprises market.

Group chief executive Alan Knott-Craig said: "We are standing on the brink of a significant change in the way that corporate South Africa communicates.

"In this environment Vodacom plans to be a next generation network service provider, delivering on mobile and fixed voice, video and data requirements of all businesses," he said.

Vodacom's move to stay competitive comes in the wake of MTN's announcement of its launch of Network Solutions for business clients.

Cell C, on the other hand, has not managed to break away from being a pure mobile voice provider.

MyADSL director Rudolph Muller said: "It's a logical decision for Vodacom to expand. It's part of [shareholder] Vodafone's worldwide strategy; they're starting to see decline in voice revenues.

South Africa's cellphone market is virtually saturated. Its saturation levels are hovering at about 90percent.

In some European countries saturation is up to 120percent or 130percent with people owning more than one mobile phone.

"Sooner or later you run out of people who will be using cellphones. A company like Cell C is lagging behind and will find itself in a tight space in the years to come," Muller said.

Vodacom said it intended to remain the cellular market leader but aims to leverage off the changes and developments in the market in order to lead with an aggressive converged-solutions strategy.

Vodacom is building a fibre-optic network and the first ring will be completed in Gauteng by April.

The network is being built with links to many of South Africa's top blue-chip companies, which have indicated that they would commit to infrastructure and service contracts with Vodacom Business.