Vodacom gets aggressive

By Damaria Senne, ITWeb senior journalist

Mauritius, 12 Sep 2007

A turf war is brewing in the converged fixed-mobile space, with Vodacom vowing to "flatten competitors", including 50% shareholder Telkom.

Vodacom ISP CTO Thami Msimango said it will take three to five years for the mobile operator to set up its fixed-line infrastructure and make a dent in the converged fixed-mobile market.

Msimango was speaking to ITWeb on the sidelines of Southern African Telecommunication Networks and Applications Conference 2007, taking place in Mauritius.

Msimango would not quantify the size of the market share Vodacom plans to gain within this period. However, he said, Vodacom will "never surrender" its position as telecoms provider with the highest number of subscribers, regardless of the "gymnastics" it has to undergo to expand its service offerings.

The gymnastics alludes to changing business models brought on by convergence, which have forced Telkom to consider selling its fixed-line assets to MTN. Telkom also said it was in discussions to sell its share in Vodacom.

"We want to dislodge Telkom and Internet Solutions and other suppliers from their current positions in the converged market, so when people talk about connectivity, they talk about Vodacom," he said.

Fair and square

Msimango said Vodacom does not expect Telkom to give away its business without a fight. "But we plan to beat them fair and square."

Vodacom will continue to focus on the provision of voice solutions, as there are still opportunities for growth in that area, he said. However, it will also grow its other revenue streams, such as the provision of data and multimedia content.

Vodacom's target area for growth includes gated communities, he said. "Some of the people in these communities are also key decision-makers in the corporate sector."

Last week, MTN also announced plans to roll-out a 5 000km national fixed-line infrastructure, worth about R1.3 billion. MTN SA MD Tim Lowry said the company expects the infrastructure to be operational by 2009.

MTN Network Services CEO Mike Brierley said at the launch that MTN expected Telkom, Vodacom and Neotel to compete aggressively in that space. "MTN does not fool itself into thinking it's going to be the only company providing fibre connectivity."

Brierley added that initially, there would be a turf war, but the war would not last long, as fibre would also be commoditised. More competition would drive prices down, with customers as the final beneficiary, he said.