Vodacom in R2.5bn expansion


The Vodacom Group has announced a capital investment of R2.5bn over the next five years that will reposition the company from being a mobile centric network operator to a leading provider of converged information and communication solutions.

“We are standing on the brink of a significant change in the way corporate South Africa communicates and in this environment Vodacom plans to be a next generation network service provider delivering on mobile and fixed voice, video and data requirements of all businesses,’ said group CEO Alan Knott-Craig. “In a playing field that has quickly become crowded, we will differentiate ourselves with the services that are provided on top of the network infrastructure layer,’ he said.

Vodacom has established a new division called Vodacom Business to provide end-to-end converged solutions and services for the corporate and SME markets. “In a maturing South African market where cellphone SIM card penetration is already over 90%, our future lies in expanding our business horizontally.

We believe that substantial changes will take place in the telecommunications world this year, with the main drivers being within the regulatory and competitive environments,’ Knott-Craig said.

He added that Vodacom plans to remain the cellular market leader, but aims to leverage off these changes and developments in order to lead with an aggressive converged solutions strategy in the market place. “Secondly, the demand for broadband is growing exponentially whilst being stifled by the country’s limited transmission capacity.

Vodacom has now started the process to build our own transmission capacity for the Vodacom network as well as for our corporate customers,’ Knott-Craig said.
He added that the information communication technology (ICT) landscape has been developing rapidly over the last 18 months.

“Vodacom Business has been positioned to offer centralised network architecture combined in a hosted environment to offer a full range of converged communication solutions by the second quarter of 2008. The resulting economies of scale will generate significant cost savings for customers, as well as improvements in network efficiencies, security, back-up of data and applications, and power redundancy.’

Vodacom is building a fibre optic network and the first ring will be completed in Gauteng by April. The network is being built with links to many of South Africa’s top blue-chip companies, who have already indicated a commitment to infrastructure and service contracts with Vodacom Business.

The slow but steady liberalisation in the ICT industry as well as the introduction of new licensed operators has set the stage for fixed and mobile network operators to compete directly with ICT vendors, Value Added Network Service Providers (VANs) and Internet Service Providers (ISPs).

With the changes in the Electronic Communications Act, the number of players providing information communication infrastructure has grown. Vodacom Business will differentiate itself at the service end of this new and developing playing field with four main towers of services to market.

  • Access Services will build state-of-the art access networks to provide last-mile connectivity and broadband access with service level agreements to ensure optimum uptime and availability.
  • Hosted Services will give customers the ability to outsource functions such as hosting, application services, storage and security functions allowing companies to take advantage of the scale and diversity of a large infrastructure and focus their attention on their core business.  
  • Managed Network Services will provide high-quality first-tier Internet and managed network services to businesses. This includes a range of Internet access mediums, virtual private network (VPN) solutions and a next-generation network that will provide a wide variety of simultaneous voice, video and data communication options.
  • Converged Application Services streamlines the access and management of mobile applications and their various service providers into a seamless service that is globally operational, supporting a full range of communication devices, from cellphones to laptops to PDA’s.


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