Vodacom to spread its wings into africa

Zweli Mokgata

The Vodacom Group is preparing to spread its wings into Africa when the sale to major shareholder Vodafone is approved.

Vodacom said yesterday revenue for the nine months ending December last year had increased by 13,7percent to R40,5billion compared to the previous corresponding period.

It grew subscribers by 14,3percent to 37,8million for the same period across all five of its operations.

Vodacom chief executive Pieter Uys said: "Expanding our African footprint beyond South Africa is one of the pillars of Vodacom's growth strategy.

"The acquisition of Gateway Communications [a network service provider with operations across 40 countries] was completed at the end of the quarter, and will help us to further build our business across the continent."

In South Africa, Vodacom increased its mobile customers by 4,8percent to 26,5million at the end of December - compared to the end of the previous quarter where it had 25,2million subscribers.

The company has also managed to build up its operations outside South Africa to 30percent of all customers - an indication of its intentions to grow outside South Africa's borders.

Out of the five operations - South Africa, Tanzania, Mozambique, Congo and Lesotho - Mozambique had the biggest growth in customers of 11,5percent to 1,4million and average revenue per user growth of 10,5percent.

Last year Telkom said it had accepted a R22,5billion offer by UK-based Vodafone to buy an additional 15percent in Vodacom, raising its stake to 65percent.

The remaining 35percent is destined to go to Telkom shareholders and the public in the form of a JSE listing. The deal is subject to approval by competition authorities.

Andre Wills, managing director of Africa Analysis, said: "When the deal goes through we might see Vodafone grouping regional operations, such as Safaritel (Kenya) and Ghanatel, under Vodacom. It'll make it easier for Vodafone to introduce products and services into the country."

Lindsey McDonald, an analyst at Frost & Sullivan, agreed that the company would want to accelerate entry into the Pan-African market this year.

"They'll need to start this year or else they'll miss out on opportunities from the expected rise in data usage across the continent during the period around the World Cup."