Vo­da­com Busi­ness Africa tar­gets op­por­tunis­tic growth

Finweek English Edition - - INSIDE - BY GUGU LOURIE ed­i­to­rial@fin­week.co.za

Vo­da­com Busi­ness Africa is cur­rently tar­get­ing growth in Nige­ria and Zam­bia as part of its cus­tomer-led in­vest­ment strat­egy. The f irm 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, told Fin­week.

At growth of about 5%, Morocco is ex­pected to emerge as the fastest­grow­ing 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 f irm 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 t he 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 i n t he 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. FI­BRE IN ZAM­BIA AND NIGE­RIA Vo­da­com Busi­ness Africa has also been mod­ernising its fully-f ledged 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 f i rm 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-tothe-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-f ledged 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 l ine we think we’ll con­sider fi­bre. For us fi­bre in Nige­ria is more op­por­tunis­tic, rather than a def­i­nite strat­egy.”

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

Vuyani Jarana Chief of­fi­cer of Vo­da­com Busi­ness

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