Vodacom Business targets Morocco

By Gugu Lourie

Vodacom Business Africa targets opportunistic growth in Morocco, Nigeria and Zambia

Vodacom Business Africa is currently targeting growth in Nigeria and Zambia as part of its customer-led investment strategy. The firm is also looking at expanding into Morocco, where it is seeing a proliferation of multinationals setting up businesses.

Vodacom Business Africa already has hubs in West, East and Southern Africa, but not yet in the North African region.

The firm views Morocco as an important hub as many customers are moving or setting up operations there, chief officer of Vodacom Business at Vodacom Group, Vuyani Jarana, said.

At growth of about 5%, Morocco is expected to emerge as the fastest growing economy in North Africa this year, as the new consensus government ends a period of uncertainty and paves the way for bolder economic reforms, according to the Institute of International Finance.

The enterprise arm of Vodacom, a cellphone operator owned by British mobile giant Vodafone, already has points of presence in 27 countries in Africa including Ghana, Kenya, Nigeria, Angola, Equatorial Guinea and Zimbabwe, and services about 40 countries.

Vodacom Business Africa has one of the largest enterprise business footprints on the continent, which it gained through the $700m (at the time R5.1bn) acquisition of African network and satellite services firm Gateway Communications in 2008.

It competes for enterprise customers with Africa’s largest mobile phone operator MTN and French telecoms group Orange in the rest of Africa.

In 2012, Vodacom Business Africa sold non-core assets of Gateway Carrier Services for R220m and kept the enterprise segment.

In conjunction with Vodafone Global Enterprise, Vodacom Business Africa serves multinational clients across Africa and globally.

Vodacom Business Africa is targeting more growth opportunities in the enterprise space as part of its expansion drive after modernising its Multiprotocol Label Switching (MPLS) network across the continent. The MPLS network offers a highly scalable method for carrying data quickly and efficiently, especially for corporates.

Opportunistic fibre in Zambia and Nigeria

Vodacom Business Africa has also been modernising its fully-fledged networks in some of its big hubs. It’s currently seeking ways to diversify its revenues in both Zambia and Nigeria, with Jarana saying the Zambian market is a very good story for the company.

“In a sense it’s a business that continues to accelerate. It also continues to give us a foothold in both the consumer and enterprise space,” he explained.

The firm currently operates an Internet service provider in Zambia, focusing on the consumer market and is also looking at high-value residential areas on a targeted basis.

“We are starting to look at fibre-to-the- homes [FFTH] in Zambia,” Jarana said.

However, it was an “opportunistic move”, rather than an aggressive all-out investment.

“We are very clear and thoughtful about how we invest,” he said. The firm will only start a fully-fledged investment in areas once it has tested how the market responds. So, it’s a very balanced risk and opportunity model.”

Vodacom Business Africa provides full ICT services in Nigeria for the enterprise segment and is expecting competition to heat up as rivals MTN, Etisalat, Airtel and Glo Nigeria enter the same space.

Jarana said the company is geared for competition.

The firm believes a wireless network is still the best way to deliver broadband in Nigeria, as such a network is more stable, he said.

“Down the line we think we’ll consider fibre. For us fibre in Nigeria is more opportunistic, rather than a definite strategy.”

Meanwhile, Vodacom in South Africa is banking on its yet-to-be concluded acquisition of Neotel to accelerate roll-out of FTTH and fibre-to- the-business.

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• This article is also published in Finweek