Vodacom Shows Interest In Collaborating With Safaricom In Ethiopia
Shameel Joosub, Vodacom’s CEO recently announced to Business Day that Vodacom is interested in a possible entry into Ethiopia, Africa’s fastest-growing and second-most populated country, in partnership with its Kenyan associate company, Safaricom.
Ethiopia said in June that it had finally decided to open its state-run telecoms monopoly to foreign investors. Joosub feels that the East African state is “probably the most attractive” potential new market for Vodacom after the group reported a decrease in revenue growth in its home market, South Africa.
At the time of the Vodacom’s engagement with Business day, the opportunities not yet clear, but Joosub said there were indications that Ethiopia would issue additional licences, and probably take in a strategic partner for the existing [government-owned] Ethio Telecom, but there was nothing yet regarding actual processes and such.
Vodacom has been scoping out the Ethiopian market for years to diversify its earnings, which rely primarily on the SA market. In 2013 it opened an office in Ethiopia and secured a service licence to provide all services other than standard voice calls.
The East African nation of 105-million people is the second most populated country in Africa coming right behind Nigeria which is the most populated.
The IMF expects that Ethiopia will have the fastest-growing economy in Sub-Saharan Africa in 2018, with growth at 8.5%. Meanwhile, the SA economy has been in recession, and this has negatively affected the growth of network operators in the country.
Vodacom has struggled in the midst of SA’s financially trying times with data revenue growth declining by approximately 50%.
Joosub said the decline in data revenue growth is likely to be temporary and that the rate would accelerate back to its usual amount over time.
Vodacom has operations in Lesotho, Mozambique, the Democratic Republic of the Congo, Kenya and Tanzania.
The Independent Communications Authority of SA (ICASA) recently published new rules regarding the expiry of data bundles.
The price of data in SA was cut down by 16.4%, but Joosub said that this didn’t worry him too much because usually when data prices are lowered, demand tends to ultimately win the battle and usage numbers start going up to compensate after about four months.
Joining forces with the Ethiopian Safaricom would definitely boost Vodacom’s business and would be mutually beneficial as Ethiopia would in return be receiving the premium-class mobile service that has become synonymous with the Vodacom brand.
Credit: This article originated from www.businesslive.co.za