Vodacom is making a big broadband services play, with buildout plans to accelerate fibre internet to homes and businesses through the country’s latest infrastructure company, Maziv.
The telco says its expansion programme, driven through Maziv, will accelerate fibre reach in SA, foster economic development and help bridge the digital divide.
The recently launched Maziv was born out of the Vodacom deal with Community Investment Ventures Holdings (CIVH).
The deal saw Vodacom − through a combination of assets of approximately R4.2 billion and cash of at least R6 billion − acquire up to 40% of the ordinary shares of a newly-created, wholly-owned subsidiary of CIVH (Maziv), which holds CIVH’s current interests in Vumatel and Dark Fibre Africa (DFA).
It has now received part of the necessary regulatory approvals. The Independent Communications Authority of SA recently approved the transaction, subject to the incorporation of conditions relating to the provision of open-access network services, along with limitations on ownership and control, into DFA’s licences.
The Competition Commission approval process is still ongoing.
Vodacom Group CEO Shameel Joosub has shared with ITWeb the telco’s near-term roadmap for fibre, financial and internet of things (IOT) services, signalling strong market aggression in the next six months.
Last week, Joosub gave an account of the company’s performance during the first six months of the year, saying Vodacom’s solid showing was supported by insurance, new products and an improved performance of the airtime advance product.
Detailing his plans for the next half of the year, Joosub said on fibre: “Most of it [the plan] is all centred on CIVH. Effectively, it’s buying into the vehicle [Maziv] and making sure that we can accelerate. Basically, the idea would be to separate [the fibre business] into a new company called Maziv, and essentially, we put in our assets. We put in cash to accelerate the rollout of fibre to home, fibre to the business and also fibre to the base station.”
The deal, he pointed out, is closely aligned with Vodacom’s system of ‘advantage’, which is aimed at delivering diversified and differentiated connectivity offerings to customers.
Joosub said Vodacom is continuing to scale in fibre, and in the six months ended September, homes and businesses connected reached almost 150 000, while its fibre passed more than 160 000 homes and businesses.
Bold strategy
On financial services, Joosub said Vodacom is up for a big play, as it is already processing over R6 trillion worth of transactions through its platform, and plans to scale across the continent are on the cards.
“We want to expand into investments; we want to expand our insurance offering beyond SA to other markets. We have 63 million customers buying financial services products; adding Egypt and Ethiopia will be substantial in terms of numbers and growth.
“We think it’s going to be very good for us, in terms of what we managed to do. We are the largest fintech on the continent,” he noted.
As an example of investment products, Joosub said in Kenya (through Safaricom), the telco is selling a mobile phone-based government bond, and plans are now afoot to take the product to other markets.
The government bond is offered on M-Pesa and investors are able to buy the bond on their phones, where a record of their holdings will be stored and coupon payments are also made through the phone.
The telco’s VodaPay super app will spearhead Vodacom’s financial services plan, as the platform will be used to on-board new customers.
Launched a year ago, VodaPay has 2.2 million registered users, and near-term plans include cash-in and cash-out capabilities, as well as affordable consumer micro loans.
Another area of interest for Joosub is the swelling IOT market, which is buoyed by the rising adoption of IOT technology across industries.
The South African IOT market is expected to register a compound annual growth rate of 19.12% in the next five years (2022-2027).
Latest research by Mordor Intelligence says the ongoing digital transformation across the country is supported by IOT technology, which is empowering the next-generation business model.
Joosub said in SA, Vodacom has more than seven million SIM cards and machines of things. “That’s a big business for us and that business has been growing over the last couple of years.”
In the current reporting period, Vodacom’s IOT connections were up 23.2% to 7.1 million, with revenue growth at 7.5% to R0.7 billion.
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