VOICE
FROM OPERATORS
Vodacom South Africa:
Leader of mobile broadband,
beyond mobile
Vodacom is a Pan-African cellular communications company providing a world class GSM service to more
than 34.6 million customers in South Africa, Tanzania, the Democratic Republic of the Congo, Lesotho
and Mozambique. Vodacom South Africa launched its 3G network in December 2004 and its 3G HSDPA
network in March 2006, and its 3.6Mbps HSDPA with HSUPA network in February 2008. Vodacom’s South
African GSM and 3G networks cover more than 98% of the population.
By Joyce Fan
H
ow should a leading mobile
operator maintain its
growth momentum in an
almost saturated market like
South Africa? Vodacom, the dominant
mobile player in South Africa with over
55% market share, sees and grasps the
opportunities in rapid data products
growth and horizontal growth initiatives.
By offering affordable and fast-speed
mobile broadband services, Vodacom
attracted a customer base which increased
10 times in just two years. Moreover,
Vodacom’s efforts go beyond mobile. This
February, it launched Vodacom Business
which aims to expand Vodacom’s value
proposition beyond mobile into the whole
ICT environment through a full set of
converged communications offerings.
Mr. Ermano Quartero, the Managing
Executive of Products and Marketing
Department of Vodacom Business,
shared his insights on mobile broadband
expansion, the present and future of
Vodacom Business, as well as how
Vodacom is preparing for the future.
Leader of mobile
broadband
Reporter: Vodacom South Africa
deployed the 3G/HSDPA network in
March 2006, in just two years time,
your mobile broadband data customer
increased by 10 times, reaching 370
thousand subscribers. Meanwhile,
consumers rated Vodacom as the Best
Broadband Provider in South Africa
in 2008. Would you share with us the
success factors of Vodacom mobile
broadband?
Ermano Quartero: Vodacom was and
still is the largest broadband provider
in South Africa on that of wireless 3G
services. Last year, our data products
revenue achieved a growth by 49.6%.
The number one success factor of
HSPA is the coverage compared with our
competitors with the amount of available
base stations. We’ve got more channels to
the market. Second, there are certain valueadded applications now being developed.
And we install a lot quicker than fixed line
and ADSL. Meanwhile, the broadband
access cost is still affordable, which really
contributes to bridging the digital divide.
Our challenge and our fight is to further
bring down the cost of broadband access,
in another way is the cost of access to
Internet.
The market environment also gives us
a lot of opportunities. South Africa is a
market that is deregulating, and also has
a high percentage of small businesses.
However, like most of Africa, it lacks
broadband access. That is an ideal market
to go and launch mobile broadband using
HSUPA and WiMAX.
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VOICE
FROM OPERATORS
[
Based on our experience and operation outside
South Africa, I think the success factors of Vodacom
HSPA are equally applicable in other African
countries. Vodacom has got affiliate companies
operation in Kenya, Ghana, Mozambique, DRC,
Tanzania, and Lesotho. The evidence that Vodacom
operation outside South Africa also provides 3G
voice and HSPA services successfully shows that the
success in South Africa would be carried into other
geography.
Reporter: From the technological point of
view, mobile broadband can be realized through
either HSPA or WiMAX, and we know Vodacom
uses both two technologies. Then, how do you
comment the similarity and difference between
WiMAX and HSPA?
Ermano Quartero: HSUPA and WiMAX
probably offer the same speeds. In South Africa,
HSUPA offers a higher speed than WiMAX. People
are saying that why I should have WiMAX if I’ve got
a mobile equivalent.
Small Businesses and corporate customers who
want to have Voice over IP and access need a reliable
and consistent service. Although WiMAX is more
expensive, and is more complex to deploy, but once
it’s been deployed it will be more reliable. That’s why
we feel that WiMAX is for the business consumers
and HSUPA is a kind of broadband for consumers of
individual users. So that is what we see the difference.
Beyond mobile
Reporter: We know that Vodacom launched
Vodacom Business this February. Can you explain
the market opportunity underlying this business
initiative? And what’s the strategic aim of this
division?
Ermano Quartero: Vodacom has initially been
a mobile operator. In the South Africa market, the
mobile penetration ratio is reaching the saturation
point. We need to look for growth opportunities
before the market has saturated. So we explored an
9 NOV 2008 . ISSUE 44
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We will focus on the more traditional IP space, to
provide Internet access, and provide datacom services.
So it is going to expand Vodacom’s value proposition
beyond mobile into the whole ICT environment.
initiative to expand our offering horizontally to catch
more calls, the data and the ISP space.
Essentially what Vodacom Business does is a
new division of Vodacom to focus on non-mobile
businesses. We are going to focus on the more
traditional IP space, to provide Internet access, and
provide datacom services. So it is going to expand
Vodacom’s value proposition beyond mobile into the
whole ICT environment.
Initially, Vodacom Business aims at the corporate
clients and SMEs. All the product will be developed
and aimed at corporate and enterprises. But we can
both use them for the SME market before we enter
the enterprise. And then, in time, we will tackle the
home market, the consumer market. But the initial
strategy of Vodacom Business is the corporate market
and small business market.
Reporter: Can you briefly describe the current
service portfolio of Vodacom Business?
Ermano Quartero: The current portfolio is set up
into four kinds of service.
The first kind of service we call it Access Services
and that business unit focuses on the connectivity
into the Vodacom network. So we are providing fiber
access, WiMAX, ADSL, microwave and satellite
connectivity.
Then we see the other three services, one is the
group services called Managed Network Services.
It will provide high-quality first-tier Internet and
managed network services to businesses. Services like
ISP solutions, VPN and Voice over IP are all together
in this one portfolio service.
The third one is what we call Hosted Services.
We basically launch the data center, security services
and hosting services all in that one. The forth one is
what we call Application Services. The services are
inside the data center that all services that customer
consume about the application, say markets of
shipment, portals, Google X.
We will be hosting SAP, and we will be hosting
Oracle for our customers. So those are all the four
products and services that we came into the market.
Reporter: How do you promote the new
a lot of base stations. But when it’s all
connected to the core network, we don’t
have our own backbone to carry the traffic.
Two cables that connect Africa to the
rest of the world are very expensive and
saturated.
We’ve got a very aggressive plan to roll
up the fiber-optic cables in South Africa.
There are three new cable systems being
deployed right now. Two cables are on the
east coast, and one cable is on the west
coast. And Vodacom is participating in
most cable systems.
When the backbone is our own
backbone, we can really turn on high
speed of access, and then the data traffic
will surpass the voice traffic. It not only
brings more capacities to South Africa, but
makes it more affordable for South Africa’s
broadband access. Whether it is in South
Africa, whether it is in Nigeria, whether it
is in Ghana, we can bring that cost down
which can bridge that digital divide.
Mr. Ermano Quartero, the Managing Executive of
Products and Marketing Department of Vodacom Business
services to the target customers? And
how is the market acceptance so far?
Ermano Quartero: We are fortunate
that Vodacom has got a very large
customer base already. In the mobile
business that we are the leader in South
Africa with about 54% market shares. So
we are calling on our existing customers
that on our mobile services to sell our
whole range of other services, convergent
solutions etc.
So we focus primarily on our existing
customers, we also run strong market
campaigns; we have gone on a very large
launch. We invite corporate customers
come to our premises and we present to
them and we also retrained ourselves.
We just launched the services two
months ago. The market is taking them
very well. We are hoping that in the next
six months we will sign up with several
corporate customers.
Infrastructure support
Reporter: Vodafone Group predicts
that the traffic carried on Vodafone’s
network by voice will be surpassed by
that of data sometime in 2008. When do
you think this will happen for Vodacom?
And how will you prepare to handle the
data traffic surge?
Ermano Quartero: I think the critical
moment is going to be 6 or 8 months
away when we launch HSDPA 7.2Mbps
and build our own backbone.
The hindrance right now for providing
high speed capacity is the backbone. The
radio access network is fine, as we have
Reporter: South Africa will host the
2010 FIFA World Cup. As the leading
mobile operator, how will you prepare
to support this event and showcase your
advanced services to the world?
Ermano Quartero: Our plan is to put
down a lot more infrastructures ahead of
the World Cup, so that we can provide
more reliable services and support highspeed capacity. We are building the fiberoptic network already, and it will be
ready before the World Cup. With great
flexibility, we just add capacity as we need
as we bring more customers.
The other plan is to increase the
coverage capacity around all stadiums,
around all the major areas, and we work
very closely with the Tourism Board to
provide Vodacom branding and Vodacom
wireless hotspots in all the hospitality
establishments. We are also working with
some of the key hospitality services to
provide on-line bookings and also going to
provide WiMAX services to tourists that
come to South Africa.
Also we rely heavily on Vodafone,
because all the tourists that come to Africa
we want them run on our GSM network.
So there is going to be a lot of technology
deployment to make sure when the
customers come, we are their first choice.
Editor: Gao Xianrui sally@huawei.com
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