How Is Vodacom Positioning Itself for The Future?

Vodacom is adapting quickly to the new digital future and is optimizing the value chain through machine learning, artificial intelligence, process automation and the use of big data.

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Vodacom (Vodacom's Results Presentation)

In the face of disruptive threats, such as voice calls over platforms like WhatsApp, mobile phone operators have sought greater efficiency through industry consolidation.

But Vodacom, South Africa’s biggest mobile phone operator, is positioning itself into a fully digital organization.

Instead of pursuing consolidation, which is a temporary fix, Vodacom is repositioning its core network business to maximise its resilience and increase its capabilities.

In the six months to end-September 2018, Vodacom added 4.8 million customers, up 10.7%, comprising 2.5 million in South Africa and 2.3 million in its international operations. Kenyan-based mobile phone subsidiary Safaricom added 373 000 customers.

The Vodafone-owned mobile phone operator now serves more than 109 million customers, who are unwilling to compromise on quality and value.

To ensure that it retains and attract new customers, Vodacom is building itself as a digital organisation of the future underpinned by innovation, agility, and new skills.

The country’s biggest mobile phone operator is building its future to be beyond being a telco but it is creating new platforms.

Vodacom creating new platforms
Vodacom creating new platforms

The plan seems to be working for Vodacom.

“We are progressing on our digital telco strategy,” said Shameel Joosub, Vodacom CEO.

“The aim of this strategy is to increasingly utilise digital processes to both enhance the customer experience and contribute to cost efficiencies in the business. This will be made possible through key enablers such as Robotic Process Automation (RPA), Artificial Intelligence and Big Data analytics.”

In the six months to end-September, Vodacom delivered a 55% rise in FinTech revenue to R709 million.

The operator is expanding into a new business in the FinTech space.

Vodacom, which is South Africa’s only mobile operator with an insurance licence, has 1 million insurance policies.

It provides life and funeral insurance. It also provides device insurance services to both contract and prepaid customers in SA.

Furthermore, Vodacom’s strategic focus on providing customers with easier access to airtime through Airtime Advance and using Big Data analytics to further enhance this proposition has resulted in R2.9 billion of airtime generated through this platform.

The company said revenue earned from this service more than doubled, with 8.4 million customers now using this convenient way to purchase airtime,

As part of the digital journey, Vodacom introduced chatbots, which helped the telco to increase focus on its online direct channel and improved its Express recharge offering to drive uptake of this direct sales channel.

Vodacom has deployed 20 RPA bots saving 49k man hours.

In future, scaling of these efforts will address commission cost and other operating costs to both offset inflation-related increases and reducing overall costs, the company said.

Vodacom is also planning to launch its own payment gateway, Vodapay, and to introduce digital wallet to its customers.

“Expanding our platform ecosystems to enable partnerships and digital content will enable future revenue growth opportunities,” said Joosub.

“We are aiming to add to our platform strategy by adding to our video and financial services platforms in the future.”

Vodacom’s mobile money platform continues to improve.

"Mobile Money". Background: red
Mobile Money – Two smartphones show the currencies of Africa. Between: A map of the continent in black with the inscription “Mobile Money”. Background: red. (Photo Credit: www.shutterstock.com)

The group revealed on Monday that the combined customer base, including Safaricom, grew 13.7% to 34.2 million mobile money customers.

In its international operations, Vodacom processed M-Pesa transactions worth $14 billion, supporting a 25.2% increase in revenue to R1.4 billion. M-Pesa now supports 21 million Safaricom customers, an increase of 8.8%, and M-Pesa now constitutes nearly one-third of its service revenues.

M-Pesa, while enabling a digital society through connectivity is proving to be a success, said the company.

“We continue to invest and expand in the ecosystems of these platforms and expect this will remain a strong driver for growth in the future.”

The operator is planning to grow and digitise its current insurance offering and expand other services (payments and lending).

Logo of Vodafone. M DOGAN / Shutterstock.com
Logo of Vodafone. M DOGAN / Shutterstock.com

Vodacom is also tackling video on demand (VoD) services. IN September 2018, Vodacom launched Video Play services which now has 600, 00 users.

The company is also planning to launch an up and coming artist platform, My Muze.

Vodacom is also tackling e-commerce. It has recently launched a Masoko e-commerce platform in Kenya.

The Vodafone-owned telco is also seeking new revenue streams in the Internet of Things (IoT) space. The firm has seen the number of connected IoT devices on its network rising by 22.4% to more than 4.2 million in the six months to end-September 2018.

Vodacom is working on delivering Consumer IoT services.

Clearly, Vodacom is adapting quickly to the new digital future and is optimizing the value chain through machine learning, artificial intelligence, process automation and the use of big data.

Without a doubt, the telecoms industry is undergoing one of the largest transformations to affect the industry.

As a result, Vodacom is actively seeking new revenue streams by launching new services that give it a competitive capability in the digital space.

Vodacom seems to more focused on creating the best customer experience that is driven by seamless, personalized services.

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